Singapore SGS Bond

[lzydata]

Thanks so I think you also will not be participating correct?

Correct. But I admit I was tempted to put in $1k for last year's inaugural 30-year 1.875% pa SGS Infrastructure bond for the lolz.

Just checked, price now is 80.80

 

[vsvs24]

Maybe when details are out, someone should open a new thread for the green bonds.

 

[lzydata]

Maybe when details are out, someone should open a new thread for the green bonds.

Technically they are also SGS, like the first infra bond and this coming green bond is also SGS. SGS (Market Development) versus SGS (Infrastructure).

Public Notice (4 August 2022)
https://www.mas.gov.sg/-/media/MAS/...hash=13A12D48FDA47F6EDEA53CE1924EF51C820DA831
Update: it's at 3.04% pa.

The effective yield will be 3.04%, as determined through the institutional book-building process [1] . This entails a coupon rate of 3.00% per annum and a price of S$98.976 per S$100 in principal value.

https://www.mas.gov.sg/news/media-r...ublic-offer-now-open-for-individual-investors

 

[Leaden]

Green SGS (Infrastructure) bond factsheet

https://www.mas.gov.sg/-/media/MAS/...-Factsheet-for-Public-Offer-4-August-2022.pdf
3% Interest payment semi-annually, 1 Feb and 1 Aug.

Only $50 mil for individual investors, and allocation methodology is "allocated to as many individuals as possible".

 

[reddevil0728]

Green SGS (Infrastructure) bond factsheet

https://www.mas.gov.sg/-/media/MAS/...-Factsheet-for-Public-Offer-4-August-2022.pdf
3% Interest payment semi-annually, 1 Feb and 1 Aug.

Only $50 mil for individual investors, and allocation methodology is "allocated to as many individuals as possible".

Actually is always like that.

when something new, they want to spread it out as much as possible so that they can get as many ppl to be vested as possible.

$50m might seems small, but would many fancy 3% for 50 years?

 

[lzydata]

Although it is SGS, public applications must be made at the ESA/IPO section rather than SGS, for some reason.

The product factsheet has this summary of risk factors that I find very helpful for all long-tenor SGS.

SGS are issued by the Singapore Government. Singapore is rated “AAA” by all 3 international credit rating agencies. Nevertheless, it is important that you are aware of specific risks associated with bond investments, and carefully consider whether these are in line with your investment objectives. In particular:

Interest rate risk
• The price of a bond will vary during its lifespan. Bond prices and interest rates move in opposite directions. When interest rates increase, bond prices fall, and vice versa. In addition, long-tenor bonds are more sensitive to interest rate changes than bonds with shorter tenors.

• With a tenor of 50 years, the Green SGS (Infrastructure) is considered a long-tenor bond, which means that its price is more sensitive to interest rate changes compared to a shorter-tenor bond. While interest rate risk will not affect the cash payments that you receive if you hold the Bond to maturity, if you sell the Bond before it matures, you may receive less than your original investment.

Liquidity risk
• The market for the Bonds may not be liquid if there are few interested buyers in the market. This means that you may not be able to sell the Bonds at the desired price.

https://www.mas.gov.sg/-/media/MAS/...hash=53F60E281C27C1FE8B49C29FC1EF075C08524805

 

[gold_eagle36]

Imo the coupon rate not super attractive for such a long duration bond.

Might as well take up a lower duration one in the market for lower interest rate risk.

 

[luohongxian]

I quite certain guys who r asking whether people got buy this green bond wont buy into this.

 

[dappermen]

I quite certain the guy who is asking so much questionson this green bond wont buy into this.

no1 asking qns leh

 

[maumu]

50 years... is super long. what happens to it when we die ah? I've got no kids or anyone to passed on to.

 

[vsvs24]

Can read this blog

https://investmentmoats.com/saving-...sgs_bond_investment_moats&utm_term=2022-08-05

 

[magicming]

50 years... is super long. what happens to it when we die ah? I've got no kids or anyone to passed on to.

As with other CDP holdings, u can will it away specifically, or as part of your residuary estate. Or if no Will, it will be distributed via Intestacy laws. If all else fails, then goes to govt.

 

[vsvs24]

50 years... is super long. what happens to it when we die ah? I've got no kids or anyone to passed on to.

Then don't put. Spend the money before you die.

 

[reddevil0728]

Although it is SGS, public applications must be made at the ESA/IPO section rather than SGS, for some reason.

The product factsheet has this summary of risk factors that I find very helpful for all long-tenor SGS.

SGS are issued by the Singapore Government. Singapore is rated “AAA” by all 3 international credit rating agencies. Nevertheless, it is important that you are aware of specific risks associated with bond investments, and carefully consider whether these are in line with your investment objectives. In particular:

Interest rate risk
• The price of a bond will vary during its lifespan. Bond prices and interest rates move in opposite directions. When interest rates increase, bond prices fall, and vice versa. In addition, long-tenor bonds are more sensitive to interest rate changes than bonds with shorter tenors.

• With a tenor of 50 years, the Green SGS (Infrastructure) is considered a long-tenor bond, which means that its price is more sensitive to interest rate changes compared to a shorter-tenor bond. While interest rate risk will not affect the cash payments that you receive if you hold the Bond to maturity, if you sell the Bond before it matures, you may receive less than your original investment.

Liquidity risk
• The market for the Bonds may not be liquid if there are few interested buyers in the market. This means that you may not be able to sell the Bonds at the desired price.

https://www.mas.gov.sg/-/media/MAS/...hash=53F60E281C27C1FE8B49C29FC1EF075C08524805

I think is because the yield is known unlike non green sgs bonds

Imo the coupon rate not super attractive for such a long duration bond.

Might as well take up a lower duration one in the market for lower interest rate risk.

It's for different objective.

a short duration bond yield might be high but is not guaranteed that u can keep rolling it forward at that high rate.

whereas this gives certainty.

 

[revhappy]

I would prefer a unit trust or ETF structure around this bond, is there any chance somebody will create it?

 

[lzydata]

I would prefer a unit trust or ETF structure around this bond, is there any chance somebody will create it?

The ABF SG Bond ETF may buy it. It has last year's 30-year SGS Infrastructure bond.

 

[milkfish]

Actually is always like that.

when something new, they want to spread it out as much as possible so that they can get as many ppl to be vested as possible.

$50m might seems small, but would many fancy 3% for 50 years?

With such a long-dated bond, when interest rate goes up the secondary market value will go up and down significantly quite violently. I personally don't think now (or anytime) is a good time for bonds this long.

 

[reddevil0728]

With such a long-dated bond, when interest rate goes up the secondary market value will go up and down significantly quite violently. I personally don't think now (or anytime) is a good time for bonds this long.

If you hold till maturity, then it is not a concern for u

 

[lzydata]

Singapore defied some of the toughest market conditions in years to issue a maiden 50-year green bond, tapping into resilient demand for environmentally friendly notes to aid its push to become a regional hub for such debt.

The city state raised S$2.4 billion ($1.7 billion) via the sovereign offering Thursday, some S$900 million more than its minimum target. The deal, whose proceeds will be used to finance public transport, attracted more than S$5.3 billion of orders.

Singapore Braves Tough Market With Debut 50-Year Green Bond

There is a pie chart about the "more than 75" investors: 73% insurance, 15% banks, 11% fund managers/central banks and 1% others.

 

[Bam25th]

I think this is like annuity, with a 3% risk free rate.

If invest $1mil, every year guaranteed $30k.

Haha if I’m rich, I will definitely pour $1m in and collect $30k every year. No need worry about the $1m.