Bonds investment

[felixleong]

now best to hold bonds with shorter maturity

after rates slowly more up, can re invest again at higher rates

 

[Perisher]

Erm. TLT and LQD's charts for 2008-2009 were almost exactly inverse to stocks - they screamed higher when stocks were tanking, and tanked when stocks were screaming higher.



They... um, they did. And TLT ended the 2008-2009 period pretty much unchanged (plus dividends).



Yeah, over the last few years, bond markets have been juiced by low cash rates and QE, so both bonds and stocks have been going up. This is the exception, though, not the rule.

And yep, once interest rates start going up, that should put the brakes on the bond market, but you still don't want to be out of bonds entirely. You'll still get interest and capital-protection, and you'll still get some ammo to buy stocks when they dip.

Ok basically this, look at the points near the peak that is on the graph.

They basically all fall together near feb 2009 from the height of end 2008 except for A35. I do understand that bonds are more stable in 2008-09 though as oppose to DJIA or S&P.

Otherwise, you are right that bonds pretty much ended unchanged.

GLD which I have not included was booming and moving hugely inverse to the stock market's drop.

So while stocks are crashing, bonds are stagnant, and gold went huge upwards.

 

[felixleong]

**FRASERS CENTREPOINT LIMITED SGD SUBORDINATED PERP NC 5-UPDATE 1**

- New Frasers Centrepoint Limited (FCL) SGD Perp announced
- Deal is significantly anchored by TCC Prosperity Limited
- Initial price guidance: Low 5%
- Issue Size: Benchmark
- Structure: Perp NC 5, reset in year 5, step up 100bp in year 10, dividend pusher & stopper, deferred distributions are cumulative and compounding
- Timing: This week's business, as early as today


Initial Yield guidance at cost Low 5%
Expected Issue Size SGD Benchmark
Denomination SGD 250k x 250k
Timing Books Open
Comments To follow

Step-up on Year 10 & every 5 yrs then-after (Coupon-reset)
Year 5: prevailing SGD 5yr SOR + Initial Spread
Year 10: prevailing SGD 5yr SOR + Initial Spread + 100bps
Year 15: prevailing SGD 5yr SOR + Initial Spread + 100bps
..etc...

Dividend pusher & stopper, deferred distributions are cumulative and compounding
Risk Rating TBC
LV TBC

Issuer: FCL Treasury Pte. Ltd.
Guarantor: Frasers Centrepoint Limited
Issue: SGD Subordinated Perpetual Securities
Ratings: Unrated
Format: Regulation S only and S274/275 of SFA, SG; Issuance off S$3 Billion Multicurrency Debt Issuance Programme
Issue Size: Benchmark
Tenor: Perpetual NC5
Ranking: Subordinated; Senior only to Issuer's ordinary shares
Call Option: [ ] 2020 & at every distribution date thereafter at par
Distribution: Fixed. Reset in Year 5 based on prevailing SGD 5Y SOR plus the Initial Spread & every 5 years thereafter
Step up: 100bps in Year 10
Distribution Payment: Semi-annually in arrear, actual/365 (fixed)
Distribution Deferral: At issuer's discretion. Any deferred Distributions are cumulative and on a compounding basis
Dividend Pusher: Yes, with 6 month look back period
Dividend stopper: Yes
Change of Control: Securities may be redeemed in whole, but not in part, at par upon Change of Control, otherwise Distribution steps up by 100bps
Other Redemption: At par under taxation reasons, accounting reasons, tax deductibility reasons, minimal outstanding amount reasons
Listing: SGX-ST
Details: SGD250K/Multicurrency Debt Issuance Programme/Singapore Law/CDP
Joint Global Coordinators: DBS Bank Ltd. and Maybank Kim Eng
Joint Bookrunners: DBS Bank Ltd., Maybank Kim Eng, ANZ, Deutsche Bank, OCBC Bank, Standard Chartered Bank and UOB
B&D: DBS Bank Ltd.
Timing: This week's business, as early as today

Comps:

FCLSP4.88 Perp NC 5 callable 09/19: 100.60, 4.74%, SOR + 285 bps
FCLSP3.7 04/19: 100.50, 3.57%, SOR + 176 bps

Overview:

FCL is an established international real estate company, domiciled in Singapore. It has core businesses property development, investment and management of commercial property, hospitality and property trusts, spanning Singapore, Malaysia, Australia, China, New Zealand, Thailand, Vietnam, the United Kingdom and the Middle East.

As of 31 Aug 2014, FCL is 88% owned by TCC Group controlled by Mr. Charoen Sirivadhanabhakdi, which are demonstrative of their support to FCL by granting the latter a ROFR over any opportunity to develop, manage or invest in TCC Group’s real estate assets outside of Thailand. There is minimal conflict of interest between FCL and the TCC Group, with the latter having businesses in other industries. FCL was listed on SGX-ST in 9 Jan 2014, and as of 15 Sep 2014, it has a market capitalization of S$4.9bn (US$3.9bn equivalent).

 

[Bedokian]

**FRASERS CENTREPOINT LIMITED SGD SUBORDINATED PERP NC 5-UPDATE 1**

- New Frasers Centrepoint Limited (FCL) SGD Perp announced
- Deal is significantly anchored by TCC Prosperity Limited
- Initial price guidance: Low 5%
- Issue Size: Benchmark
- Structure: Perp NC 5, reset in year 5, step up 100bp in year 10, dividend pusher & stopper, deferred distributions are cumulative and compounding
- Timing: This week's business, as early as today


Initial Yield guidance at cost Low 5%
Expected Issue Size SGD Benchmark
Denomination SGD 250k x 250k
Timing Books Open
Comments To follow

Step-up on Year 10 & every 5 yrs then-after (Coupon-reset)
Year 5: prevailing SGD 5yr SOR + Initial Spread
Year 10: prevailing SGD 5yr SOR + Initial Spread + 100bps
Year 15: prevailing SGD 5yr SOR + Initial Spread + 100bps
..etc...

Dividend pusher & stopper, deferred distributions are cumulative and compounding
Risk Rating TBC
LV TBC

Issuer: FCL Treasury Pte. Ltd.
Guarantor: Frasers Centrepoint Limited
Issue: SGD Subordinated Perpetual Securities
Ratings: Unrated
Format: Regulation S only and S274/275 of SFA, SG; Issuance off S$3 Billion Multicurrency Debt Issuance Programme
Issue Size: Benchmark
Tenor: Perpetual NC5
Ranking: Subordinated; Senior only to Issuer's ordinary shares
Call Option: [ ] 2020 & at every distribution date thereafter at par
Distribution: Fixed. Reset in Year 5 based on prevailing SGD 5Y SOR plus the Initial Spread & every 5 years thereafter
Step up: 100bps in Year 10
Distribution Payment: Semi-annually in arrear, actual/365 (fixed)
Distribution Deferral: At issuer's discretion. Any deferred Distributions are cumulative and on a compounding basis
Dividend Pusher: Yes, with 6 month look back period
Dividend stopper: Yes
Change of Control: Securities may be redeemed in whole, but not in part, at par upon Change of Control, otherwise Distribution steps up by 100bps
Other Redemption: At par under taxation reasons, accounting reasons, tax deductibility reasons, minimal outstanding amount reasons
Listing: SGX-ST
Details: SGD250K/Multicurrency Debt Issuance Programme/Singapore Law/CDP
Joint Global Coordinators: DBS Bank Ltd. and Maybank Kim Eng
Joint Bookrunners: DBS Bank Ltd., Maybank Kim Eng, ANZ, Deutsche Bank, OCBC Bank, Standard Chartered Bank and UOB
B&D: DBS Bank Ltd.
Timing: This week's business, as early as today

Comps:

FCLSP4.88 Perp NC 5 callable 09/19: 100.60, 4.74%, SOR + 285 bps
FCLSP3.7 04/19: 100.50, 3.57%, SOR + 176 bps

Overview:

FCL is an established international real estate company, domiciled in Singapore. It has core businesses property development, investment and management of commercial property, hospitality and property trusts, spanning Singapore, Malaysia, Australia, China, New Zealand, Thailand, Vietnam, the United Kingdom and the Middle East.

As of 31 Aug 2014, FCL is 88% owned by TCC Group controlled by Mr. Charoen Sirivadhanabhakdi, which are demonstrative of their support to FCL by granting the latter a ROFR over any opportunity to develop, manage or invest in TCC Group’s real estate assets outside of Thailand. There is minimal conflict of interest between FCL and the TCC Group, with the latter having businesses in other industries. FCL was listed on SGX-ST in 9 Jan 2014, and as of 15 Sep 2014, it has a market capitalization of S$4.9bn (US$3.9bn equivalent).

Not open for retail, as usual.

 

[wondrdoggie]

Another unrated perp. Personally I don't like the idea of buying perps. The aim of bonds to me is to get income and principle back at maturity. When it's a perp, it's like a mutual fund that is less liquid.

The SG market has seen a lot of bond issues over the past 3 years and almost every issue is snapped up, even those damn risky ones as investors seek higher yields. I have seen many times when a new issue comes up originally raising 200m (for eg) at 4.5% and have that change by the end of the day to 300m at 4.2% due to strong demand. There has also been cases where it's oversubscribed such that I don't get any allocation. So that is why they don't see the need to open up to retail investors as they can raise money easily via private banks. The demand is there.

 

[felixleong]

Another unrated perp. Personally I don't like the idea of buying perps. The aim of bonds to me is to get income and principle back at maturity. When it's a perp, it's like a mutual fund that is less liquid.

The SG market has seen a lot of bond issues over the past 3 years and almost every issue is snapped up, even those damn risky ones as investors seek higher yields. I have seen many times when a new issue comes up originally raising 200m (for eg) at 4.5% and have that change by the end of the day to 300m at 4.2% due to strong demand. There has also been cases where it's oversubscribed such that I don't get any allocation. So that is why they don't see the need to open up to retail investors as they can raise money easily via private banks. The demand is there.

Ya demand sibei strong,
But i fear when rates go up those perpetual bonds will be underwater liao