General Bonds Discussion Thread — SGD & USD Bonds

[thretiredDad]

This thread is for discussing:

Investment-grade and perpetual bonds in SGD or USD

Yield-to-maturity (YTM) vs yield-to-call (YTC) considerations

Liquidity, credit risk, and callable structures

MAS SGS, T-bills vs corporate bonds (DBS, HSBC, etc.)

Where to buy (e.g. FSM, bond desks, banks) and current indicative prices

Impact of Fed rate cuts or SORA changes on bond prices

Whether you’re a retiree looking for steady income, or just diversifying away from volatile REITs, share your views, recent buys, and watchlist here!

 

[AST781]

This thread is for discussing:

Investment-grade and perpetual bonds in SGD or USD

Yield-to-maturity (YTM) vs yield-to-call (YTC) considerations

Liquidity, credit risk, and callable structures

MAS SGS, T-bills vs corporate bonds (DBS, HSBC, etc.)

Where to buy (e.g. FSM, bond desks, banks) and current indicative prices

Impact of Fed rate cuts or SORA changes on bond prices

Whether you’re a retiree looking for steady income, or just diversifying away from volatile REITs, share your views, recent buys, and watchlist here!

Usually such bonds need you to be AI and each purchase of 250k at least, isn't it?

 

[thretiredDad]

Usually such bonds need you to be AI and each purchase of 250k at least, isn't it?

Be an Accredited Investor (“AI”). An AI means:

1. An individual:
   • whose personal income in the preceding 12 months is not less than SGD300,000 (or its equivalent in a foreign currency), or
   • whose net personal assets exceed S$2million (or its equivalent in a foreign currency), or
   • whose net financial assets (net of any related liabilities) exceed S$1million (or its equivalent in a foreign currency).

 

[thretiredDad]

Usually such bonds need you to be AI and each purchase of 250k at least, isn't it?

$250,000 nominal
with interest so low now
can use margin or CFD

 

[chekchek]

Asking about upcoming bond N525100T . If this bond reopen means the coupon rate remains at 2.5%

 

[reddevil0728]

Asking about upcoming bond N525100T . If this bond reopen means the coupon rate remains at 2.5%

Yes.

but what matters is the yield.

its 2.5% yield if you get it at $100

But price may go up or down.

so the 2.5% coupon not meaningful

 

[BBCWatcher]

Asking about upcoming bond N525100T . If this bond reopen means the coupon rate remains at 2.5%

That's correct. Assuming market interest rates hold relatively steady over the next few days, you'll have to pay above face value (roughly 3% above face value) to buy that 2.5% coupon Singapore Government Security.

 

[chekchek]

Thank all for the reply. But MAS is selling at face value right? When i go to app min sum is $1000 so can i assume its face value?

 

[reddevil0728]

Thank all for the reply. But MAS is selling at face value right? When i go to app min sum is $1000 so can i assume its face value?

For reopen no.

if you see you need to put up 115% of value to account for the potential higher price.

 

[BBCWatcher]

Thank all for the reply. But MAS is selling at face value right? When i go to app min sum is $1000 so can i assume its face value?

No.

MAS is conducting an auction. It's trying to get the highest market price for their bonds — what taxpayers and the general public expect, of course. The price determined at auction for this reopened bond will be something above face value.

Let's suppose for example you have to pay $1,030 at auction to get this $1,000 face value bond.(*) That'll mean you pay $1,030, get 2.5% coupons ($12.50 twice per year), and get $1,000 when the bond matures.(**) To bid on this bond you'll probably have to provide $1,150 (15% above face value), but you'll get the difference back ($120 in this example) if your bid is successful.

The price determined at auction (for all successful bidders) will be the lowest successful price bid (highest successful yield). Even if you bid a higher price.

Bond prices move opposite bond yields. That is, as the price increases, the yield decreases. And vice versa.

(*) Of course you can bid for more. Any $1,000 face value increment is fine, up into the millions.
(**) I suppose you could think of this as a $30 nonrefundable "entry fee" to enjoy $12.50 coupons that are "too generous" in the current interest rate environment. This "entry fee" will be determined at auction.

 

[chekchek]

Thank you all. I completely understand. Appreciate it