Astrea 8 bonds

[bombshell]

Whats the better low risk alternative for SGD to get >=4.35%?

 

[ThreeSteps]

sorry ah, just to clarify, is this open to non-AI to buy, if it's just $20k or $50k?

if so, is it just like t-bills/SSB/IPOs that we can apply via e-banking?

https://www.businesstimes.com.sg/we...eries-astrea-pe-backed-bonds-retail-investors Azalea launches latest series of Astrea PE-backed bonds for retail investors Jul 10, 2024 (Astrea 8’s Class A-1 Singdollar bonds will carry a fixed coupon of 4.35% a year, and Class A-2 US dollar bonds, 6.35%)
...The minimum subscription for Class A-1 bonds is S$2,000, and for Class A-2 bonds, US$2,000. For subscribers for the Class A-2 bonds, the exchange rate is fixed at US$1 to S$1.35.
Both classes of bonds have a final maturity of 15 years, with a mandatory call at the end of five years for Class A-1 bonds, and at the end of six years for Class A-2 bonds. The public offer will open at 9 am on Jul 11 and close at 12 noon on Jul 17. The bonds will be issued on Jul 19 and will list on the Singapore Exchange on Jul 22...

https://links.sgx.com/1.0.0/prospectus-circulars/52900
via ATMs belonging to the relevant Participating Bank
via the internet banking website or mobile banking interfaces of DBS, UOB, OCBC (eg. IPOs)

 

[kaya123]

Based on what Investmentmoats wrote, as long as you bid under $50k, you will get something, no balloting. So I'll just bid $40, since $40-49k likely to be given the same allocation.
Hopefully compared to Astrea 7, more investors will have their spare cash locked up in T-bills, so less cash available to press. So maybe press $40-49k can get $20k.

from what I read online, if bid less than 50k then will get full allocation. if bid more than 50k then will get partial depending on demand

 

[limster]

from what I read online, if bid less than 50k then will get full allocation. if bid more than 50k then will get partial depending on demand

thats not mathematically possible if there is oversubscription (likely based on previous issues) because issue size is fixed and the total number of under 50k bids can exceed issue size

 

[BBCWatcher]

sorry ah, just to clarify, is this open to non-AI to buy, if it's just $20k or $50k?

Surprisingly you don't have to be an AI for this one. Although you probably should be.

 

[BBCWatcher]

from what I read online, if bid less than 50k then will get full allocation.

No, in this case you're only assured an allocation, not full allocation.

 

[ahchan]

from what I read online, if bid less than 50k then will get full allocation. if bid more than 50k then will get partial depending on demand

Actually, it means that you will get something if you bid 49K and below. But in oversubscription situation (which most likely going to happen), the allotment may be less than what you bid.

Can take Astrea 7 as a reference.... for less than 50k, the ballot is "1:1" but the allotment amount is much less from what you bid.

 

[BBCWatcher]

Whats the better low risk alternative for SGD to get >=4.35%?

You're asking for a unicorn. There's really no Singapore dollar denominated security promising a yield of 4.35% or more that could be fairly described as "low risk" (in the common consumer understanding of that term). Including this security. "Just look at the yield" compared to a Singapore Government Security of similar tenor.

There's some debate whether this security is fairly priced given the risks associated with it. I would vote no (and am not a buyer at this price), but obviously people are free to disagree.

 

[bombshell]

You're asking for a unicorn. There's really no Singapore dollar denominated security promising a yield of 4.35% or more that could be fairly described as "low risk" (in the common consumer understanding of that term). Including this security. "Just look at the yield" compared to a Singapore Government Security of similar tenor.

There's some debate whether this security is fairly priced given the risks associated with it. I would vote no (and am not a buyer at this price), but obviously people are free to disagree.

Ya that's the dilemma. Even if its priced unfairly... Are there better alternatives out there with similar risk profile to Astrea?

 

[qhong61]

Is it high risk

 

[pclow59]

Good, will withdraw from my CPF SA and go for this, before it been transferred to my OA at end of 2024, still fetch 4% or more return

 

[limster]

Is it high risk

its super risky and yield is terrible. pls don't apply.

 

[BBCWatcher]

Ya that's the dilemma. Even if its priced unfairly... Are there better alternatives out there with similar risk profile to Astrea?

Of course there are individual bonds available at least to Accredited Investors (AIs) via Bondsupermart, for example. There's a decent selection across risk/yield/maturity profiles.

If you're a long-term investor then dollar cost averaging into a bond index fund, notably MBH, is likely a better choice. This Astrea security is really for (some degree of) risk capital that also has a specific, likely spending goal 5 years from now. Although it's a bit tricky since technically the Astrea 8 notes don't have to be called at their 5 or 6 year calls, but they almost certainly will be. Also tricky because you have no idea what allocation you'll get in this initial round. (Will your wedding 5 years from now cost $30,000 or $15,000? Well, that'll depend on how much Astrea 8 you get. Weird, right?)

 

[BBCWatcher]

Good, will withdraw from my CPF SA and go for this, before it been transferred to my OA at end of 2024, still fetch 4% or more return

But why not enjoy your government guaranteed 4.08% (current SA yield) then buy these Astrea 8 notes on the secondary market next year, in 2025? Or buy something else? Reasonable people can disagree, but I don't think I'd give up 6 months of 4+% government guaranteed yield to chase an uncertain allocation at initial allocation for this 4.35% higher risk note.

 

[ctan84]

from what I read online, if bid less than 50k then will get full allocation. if bid more than 50k then will get partial depending on demand

Read properly pls. Under 50k you will get SOMETHING, not EVERYTHING you bid for.

 

[BBCWatcher]

Is it high risk

its super risky and yield is terrible. pls don't apply.

I know there's some joking here, but I'll chime in with the serious answer.

Are these Astrea 8 securities "low risk"? I think the fair answer is no, they're not low risk, not in the common way that most retail investors understand the term.

Are they "high risk"? Again, I think the fair answer is no. These are not investments in a Brazilian cattle ranch REIT (for example).

Along the risk spectrum they're somewhere in between "low" and "high." The documents that the issuer provides help explain what the risks are, so please read those documents before you decide whether the promised 4.35% yield (SGD) is fair compensation for the risk, and that this particular vehicle is appropriate in your circumstances for your financial goals. Also bear in mind there's no guarantee you'll get any particular allocation except that if you request less than $50,000 then you'll get some allocation.

 

[pclow59]

But why not enjoy your government guaranteed 4.08% (current SA yield) then buy these Astrea 8 notes on the secondary market next year, in 2025? Or buy something else? Reasonable people can disagree, but I don't think I'd give up 6 months of 4+% government guaranteed yield to chase an uncertain allocation at initial allocation for this 4.35% higher risk note.

Actually left 5 months to enjoy 4.08% SA

 

[NTTDoCoMo]

https://www.azalea.com.sg/a8/overview

 

[d5dude]

Ya that's the dilemma. Even if its priced unfairly... Are there better alternatives out there with similar risk profile to Astrea?

I dun think they are "unfairly priced". Bonds with similar risks are trading at around these levels because credit spreads are extremely tight right now. SGD denominated IG yields are under 4% now, this isnt IG for sure, but its not quite a junk bond so 4 - 5% is probably fair.

Imo it should be closer to 5% than 4% but its a retail bond so the yield is always going to be lower.

 

[Tuckie]

business is business. they can offer what they want and up to you to take. This is not a charity.
They are earning the difference of what they can do with your cash versus giving you 4.35% fixed.* This is basic logic and for-profit business.

SG Fixed deposit 3.3% ish. SG Govt Treasury bill 3.6% ish.
US Treasuries i am guessing about 5%.
Choose your poison.

* Temasek only earned 1.6% returns in 2023. Utterly pathetic. They could have just all in on bitcoin or nvidia or another super mega cap US stock and came out so far ahead. Goes to show that the 'professional money managers' at Temasek arent really that bright.

Not that I am supporting Temasek, but I absolutely loathe people talking about all in bitcoin or Nvidia. Now I can also say if I all in bitcoin when it first started I will be a trillionaire now.

question is who does investment doing all in, and who will know what happens in the future. There’s always risk and reward. Granted Temasek’s return isn’t fantastic, but to say that all in would give better returns is just low.