New Astrea V

[w1rbelw1nd]

Returns quite low leh. Why not leverage up to boost returns? It's pretty safe since it's Temasek and got a good rating from agencies anyway? Well if I borrow 40:60 debt: equity funding, LTV from my perspective is 40% nia. If I use this to get secured financing at around 2.8% cost of debt, can boost returns to around 4.5%?

Ok right?

 

[bright_84]

Returns quite low leh. Why not leverage up to boost returns? It's pretty safe since it's Temasek and got a good rating from agencies anyway? Well if I borrow 40:60 debt: equity funding, LTV from my perspective is 40% nia. If I use this to get secured financing at around 2.8% cost of debt, can boost returns to around 4.5%?

Ok right?

3 words: Collateralized debt obligation

Rating agencies can get it wrong.

 

[limster]

3 words: Collateralized debt obligation

Rating agencies can get it wrong.

Those who cannot tell the difference between how CDO earn money and how PE funds earn money should definitely not invest in Astrea V.

The main problem is that the IPO allocation will likely be low, and buying on the secondary market, the yield is likely to be worse.

 

[bright_84]

Those who cannot tell the difference between how CDO earn money and how PE funds earn money should definitely not invest in Astrea V.

The main problem is that the IPO allocation will likely be low, and buying on the secondary market, the yield is likely to be worse.

PE and CDO of course 2 different animal. But to buy just based on rating agency ....

 

[w1rbelw1nd]

Eh the underlying is PE firms, not debt leh.

And as per the insightful, colorful infographics, over 80% are invested in buyout PE funds! Not leveraged buyout PE funds, just buyout funds! Safer! More returns better chance of Astrea V investors to do well!

Past track record of Astrea IV should also give us confidence that this issuance will also do well right... It's like a same company issue 2 debt issuance right?

3 words: Collateralized debt obligation

Rating agencies can get it wrong.

 

[Rocket3]

I've heard and read in news about trade war / recession coming to Singapore. And the yield curve is now inverted (possible sign of recession round the corner?).

If trade war / recession happens, what is the danger of losing all (or significant part of) investment in Astera V class A-1 bond?

----------
Another question:
Scheduled call date is in June 2024, maturity date is in June 2029.
Means must wait 5 years then can redeem?
Or must wait 10 years?

 

[limster]

Eh the underlying is PE firms, not debt leh.

And as per the insightful, colorful infographics, over 80% are invested in buyout PE funds! Not leveraged buyout PE funds, just buyout funds! Safer! More returns better chance of Astrea V investors to do well!

Past track record of Astrea IV should also give us confidence that this issuance will also do well right... It's like a same company issue 2 debt issuance right?

ignorance works both ways.

some people don't buy out of ignorance: eg: they think of CDO default, Hyflux default, and therefore think that all this not safe.

some people buy out of ignorance eg: friend/uncle/anonymous forum post/blogger say good, they just press.

on the other hand, there are also people who do their due diligence and conclude that Astrea V either fits or does not fit in with their expected risk-reward ratio and act accordingly. But those seem to be the minority.

 

[Outward]

wa bro. u really fast hand fast leg. but i think a bit early for such a big order. between now and 18th june, the bonds are not going anywhere.

haha booked this before holiday.

 

[Guojing88]

haha booked this before holiday.

Yep, I missed the Astrea 4 one because of overseas holiday so better apply for this before I go off this time!

 

[duhduhduh]

Feels like the risk to reward on a low side ...... ?

 

[Merg91]

Kiasi, kiasu and kiasisu don't subscribe.
Otherwise sleepless nights.

 

[limster]

Feels like the risk to reward on a low side ...... ?

was this your conclusion for Astrea IV also? the rest of us enjoy collecting coupon payment and 7.5% capital gain

 

[articland05]

Kiasi, kiasu and kiasisu don't subscribe.
Otherwise sleepless nights.

even if u hoot 1mil very heng only get 8k allocation. if 1 day Astrea V uplorry u only lose 8k...

why think so much? just hoot liao...

 

[SpeedingBullet]

Holy sh1t this thread is epic

Look, if you think it's unsafe and/or you want the 18-20% PE returns and are angry at getting a sub-4% with this, then don't buy?

Eh the underlying is PE firms, not debt leh.

And as per the insightful, colorful infographics, over 80% are invested in buyout PE funds! Not leveraged buyout PE funds, just buyout funds! Safer! More returns better chance of Astrea V investors to do well!

Past track record of Astrea IV should also give us confidence that this issuance will also do well right... It's like a same company issue 2 debt issuance right?

err.. there are no "BO" or "LBO" funds? All PE funds use leverage as and when they like. It's in their mandate and oftentimes interest to lever up.

 

[Shortthemkt]

PE and CDO of course 2 different animal. But to buy just based on rating agency ....

Yes. They are selling ratings for fees. What do u think?

 

[Shortthemkt]

was this your conclusion for Astrea IV also? the rest of us enjoy collecting coupon payment and 7.5% capital gain

Have you read the fine prints? If everything collapse, what will investors get back?

I'll admit I'm too lazy to read the fine prints. I only trust SG bonds.

 

[SpeedingBullet]

Have you read the fine prints? If everything collapse, what will investors get back?

I'll admit I'm too lazy to read the fine prints. I only trust SG bonds.

Define everything collapse.

Isn't this an SG bond? Weren't Hyflux bonds SG bonds as well?

 

[Shortthemkt]

Define everything collapse.

Isn't this an SG bond? Weren't Hyflux bonds SG bonds as well?

No, I'm referring to SSB.

 

[Shortthemkt]

Define everything collapse.

A default.

 

[limpoop]

even if u hoot 1mil very heng only get 8k allocation. if 1 day Astrea V uplorry u only lose 8k...

why think so much? just hoot liao...

no need $1m, $101k will get 8k allocation based on iv