Singapore Bonds

[Runifyouhaveto]

Disclaimer:
Not encouraging purchase of any specific bond issue, just sharing
Bonds can be risky if you chase higher-yields
Bonds-financing can make you lose more than you invest.

 

[Runifyouhaveto]

Re: Interesting Bond issues

Rickmers Maritime successfully issues S$100 million of fixed rate notes
http://en.portnews.ru/news/180497

Yield: 8.45%
Duration: 3 years

 

[Runifyouhaveto]

Re: Interesting Bond issues

DEUTSCHE BANK Perpetual
http://www.reuters.com/article/2014/05/19/deutsche-bank-bonds-at-idUSL6N0O54X620140519

USD Bonds: 6.25%, callable 6 years later
EUR Bonds: 6.35%, callable 8 years later
GBP Bonds: 7.5%, callable 12 years later

Listed in Luxembourg, needs to open custodian account with your local bank RM to own it.

Note:
Perpetual Bonds has no guaranteed redemption date but usually banks will self-impose some penalties on call-date to hint to you that they will redeem. They are issued by top banks to meet Basel-III requirements = larger capital-base to do bigger business.

 

[Runifyouhaveto]

Re: Interesting Bond issues

Hainan Airlines
http://www.businesstimes.com.sg/pre...books-first-corporate-lion-city-bond-20140517

Yuan Bonds: 6.25%
Duration: 3 years

 

[Runifyouhaveto]

Re: Interesting Bond issues

Coming up: Singapore and Korea to embrace covered bonds
http://www.emergingmarkets.org/Arti...apore-and-Korea-to-embrace-covered-bonds.html

Usually when Bank A, sells you a Bond from Company B, they have no liability if Company B defaults you.

Covered bonds are usually safer. Bank A sells you a covered bond with cashflow from an underlying asset, eg. shenton way carpark + liable if the carpark goes bust. This is an added protection for investors. Of course, we do not expect the yield to be very high if something so safe.

MAS has approved local banks to issue it in the near future.

 

[Runifyouhaveto]

Re: Interesting Bond issues

Note:
Perpetual Bonds has no guaranteed redemption date but usually banks will self-impose some penalties on call-date to hint to you that they will redeem. They are issued by top banks to meet Basel-III requirements = larger capital-base to do bigger business.

actually GOOD Preference shares need to redeem back as much as bonds during maturity:

1. Bonds offer guaranteed redemption upon maturity (unless companies go bust). Non redemption = default.

2. Preference Shares don't offer guaranteed redemption so they are considered Capital instead of liabilities (bonds). Banks have a lot of money but to meet regulatory requirements, eg. BASEL III, they need to LL issue capitals. Ordinary shares dilute voting power of the original shareholders so they issue preference shares.

3. GOOD preference shares will self-impose some sort of self-imposed penalties to hint to investors that they will redeem back. The failure to redeem by any issuer on first-call date is as good as default, in the eyes of rating agencies. So if they don't redeem = as good as a default. Their cost-of-financing will surge.


Please note that the above mentioned applies to only GOOD Preference shares from premier blue-chip companies and banks.

 

[Runifyouhaveto]

Re: Interesting Bond issues

Even our local universities need to issue bonds


Issuer: Singapore Management University
Issue Rating: Aaa (Moody’s)
Status: Fixed Rate, Senior Unsecured
Format: Reg S, S274 & 275 of Singapore SFA, issued off the S$800m Multicurrency MTN Programme
Tenor: 10 years


Issuer: National University of Singapore
Issue Rating: Aaa Stable (Moody's)
Format: S274 & 275 and Reg S Bearer, Fixed Rate Notes (off Issuer's S$1bn Multicurrency MTN Programme)
Status: Fixed Rate, Senior Unsecured
Tenor: 5 Years


Note: these were issued several months ago.

 

[bart12]

Re: Interesting Bond issues

The bonds you listed are not easy to buy in the first place.. There are very few bonds listed in SGX

 

[johnny333]

Re: Interesting Bond issues

The bonds you listed are not easy to buy in the first place.. There are very few bonds listed in SGX

SGX is the last place I would look at to do any serious investment. Must look at the US market.

Get an account with Etrade or Thinkor Swim. They have offices in Spore.

 

[krafty]

Re: Interesting Bond issues

buy US treasury, can buy from tekka market?:o

 

[Runifyouhaveto]

Re: Interesting Bond issues

The bonds you listed are not easy to buy in the first place.. There are very few bonds listed in SGX

Yes sir, there are only about ten actively-traded bonds and preference shares listed in SGX primarily market.

Don't worry Temasek says they are going to issue bonds for retail investors and earlier i mentioned about the prospects of covered-bonds launching in singapore which are all considered safer bets (lower yields) for the man on the street.
http://www.bloomberg.com/news/2014-...les-to-individual-investors-in-singapore.html

Temasek have been actively buying lately, eg Watson, Olam, etc

 

[Runifyouhaveto]

Re: Interesting Bond issues

buy US treasury, can buy from tekka market?:o

US treasury is actually a very safe and simple instrument. But these days, evil RMs are making it very toxic with derivatives that bets on small yield/price changes..

 

[Runifyouhaveto]

Re: Interesting Bond issues

SGX is the last place I would look at to do any serious investment. Must look at the US market.

Get an account with Etrade or Thinkor Swim. They have offices in Spore.

Yes sir, for investment-grade ultra-blue chips or bonds, US brokerages offer 1.65-2.0% margin financing which is very low.
Of course, if prices collapses = die pain pain + lose more than your capital inputs.

Thread carefully

 

[Runifyouhaveto]

Re: Interesting Bond issues

Primary market: price includes accrued interests. (nett-nett price = you don't need to reimburse seller for underlying undistributed interests.)

Secondary market: the price excludes accrued interests. (you still need to reimburse seller for underlying undistributed interests.)

 

[bart12]

Re: Interesting Bond issues

Hi Run, Did you stop posting in sgfuck? I remember you have a similar thread in that forum site..

Yes sir, there are only about ten actively-traded bonds and preference shares listed in SGX primarily market.

Don't worry Temasek says they are going to issue bonds for retail investors and earlier i mentioned about the prospects of covered-bonds launching in singapore which are all considered safer bets (lower yields) for the man on the street.
http://www.bloomberg.com/news/2014-...les-to-individual-investors-in-singapore.html

Temasek have been actively buying lately, eg Watson, Olam, etc

 

[bart12]

Re: Interesting Bond issues

These 2 cannot buy in secondary market

Even our local universities need to issue bonds


Issuer: Singapore Management University
Issue Rating: Aaa (Moody’s)
Status: Fixed Rate, Senior Unsecured
Format: Reg S, S274 & 275 of Singapore SFA, issued off the S$800m Multicurrency MTN Programme
Tenor: 10 years


Issuer: National University of Singapore
Issue Rating: Aaa Stable (Moody's)
Format: S274 & 275 and Reg S Bearer, Fixed Rate Notes (off Issuer's S$1bn Multicurrency MTN Programme)
Status: Fixed Rate, Senior Unsecured
Tenor: 5 Years


Note: these were issued several months ago.

 

[Runifyouhaveto]

Re: Interesting Bond issues

These 2 cannot buy in secondary market

They are fine explanations of why our uni fees need to be hiked. :p Harvard invests in bonds while our NUS/SMU issues bonds. :p
Don't give so much scholarships to foreigners lor

 

[Runifyouhaveto]

Re: Interesting Bond issues

Hi Run, Did you stop posting in sgfuck? I remember you have a similar thread in that forum site..

Dear good O'brother, RUN became a refugee in SBF after CNA forum closed. An old CNA contact found RUN and encouraged RUN to go sgfuck.

After a while there, RUN left because discovering some things there and also kanna personal attacks in pm.

 

[Runifyouhaveto]

Re: Interesting Bond issues

Bond Financing: Better than Property Investment + Die faster

After screwing us with minibonds (repackaged financial products), Accumulators (i-kill-u-later options contracts), our brilliant RMs continue to engineer more financial products with maximum leverage to sustain their business volume.

RM don't make much from bond sales. Some risky entities issued some bonds recently, with >7% yields. To increase business volume, they offer 60-70% LTV, RUN's friends bite at the bait.

Capital: $300K, LTV: 70%
Using $300K, investor purchased $1m of 6% bond = $60K per year
Bank Interest: Flexi sibor 1.3-1.4%
Cost of financing 1.4% x 700K = appx $9.8
Return on $300K Capital = $60K - $9.8K = $50K = 16.7%pa
Better than investing in properties right?

Even for less risky issues, like HDB 3%, UOB 3.5%, OCBC 4%, the yields are lower but the RMs offer 80-90% LTV. However, the investors are taking too much underlying risks. This is not the way we should live our life because of Default risk, drop in bond prices (margin call), surge in SIBOR rates.

Bond Financing can make u lose more than your capital. (please see the next reply, as an example using APPLE)

Bond investment should be kept simple.

 

[Runifyouhaveto]

Re: Interesting Bond issues

Bond-financing: Margin calls for even the safest bets
Based on the assumption that all investment-grade bonds (eg. sg govt bonds, local banks) will be redeemed upon maturity. bond investors (without bond-financing) are not concerned about bond prices.

However, bonds can bankrupt a speculator who took up Bond-financing (borrow money to buy bonds). Eg. Apple issued a 3.85% bond due to in 2043 a few years ago and the price crashed to 20% below par value in Nov 2013. Any speculator with 70% or 80% LTV for these "safe" Apple Bonds would be hurt by margin call = lose more than your capital invested.