[Official] ** Astrea VII PE Bond **

sohguanh

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based on fx risk yes.
Thanks for sharing now this add another level of risk I see hmmm... still thought to put small amount. Earlier some reader say bond hold to maturity will not lose monies but if factor in this forex risk ... i get it now
 

lzydata

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Hmmmm based on above means for class A even we invest with SGD underlying it will be converted to USD for invest? Then redeem it will repeat the other way to convert from USD to SGD. This mean regardless of class A or B upon redeem (bond call back or mature) there is a potential loss of initial capital invested?
Not for the class A bonds. Although the underlying PE investments are in USD, and also EUR, Astrea 7 has hedged its interest and principal payments up to the 5th year. That's why they can quote a fixed yield in SGD for them, and return your principal.
 

reddevil0728

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Thanks for sharing now this add another level of risk I see hmmm... still thought to put small amount. Earlier some reader say bond hold to maturity will not lose monies but if factor in this forex risk ... i get it now
that's if u r talking about class B
 

sohguanh

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Not for the class A bonds. Although the underlying PE investments are in USD, and also EUR, Astrea 7 has hedged its interest and principal payments up to the 5th year. That's why they can quote a fixed yield in SGD for them, and return your principal.
Ok say after 5th year will be the 10th year aka maturity correct? If reach that stage still follow same as up to 5th year?
 

lzydata

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Ok say after 5th year will be the 10th year aka maturity correct? If reach that stage still follow same as up to 5th year?

You can refer to the chapter in the prospectus on Hedging. The USD fixed forward currency hedges for the principal repayment and interest payments are for up to the 5th year, separately there are EUR contracts up to year 6.

"The currency hedging arrangements described above will be in place up to one year after the
Class A-1 Scheduled Call Date and will not cover the period from one year after the Class A-1
Scheduled Call Date to the Maturity Date."
 

reddevil0728

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I checked website also don't have.. 😆
did you follow the same steps as what instructions on SSB website?

they wouldn't know whether your CDP got DCS or not because you are required to key in your CDP account at the time of application. so they wouldn't even know your CDP account number
 

Perisher

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I don't know leh.. my dbs iBanking no option to buy ssb... Or maybe i just don't know..
did you link your cdp to the bank? not sure if that's needed.
 

sohguanh

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You can refer to the chapter in the prospectus on Hedging. The USD fixed forward currency hedges for the principal repayment and interest payments are for up to the 5th year, separately there are EUR contracts up to year 6.

"The currency hedging arrangements described above will be in place up to one year after the
Class A-1 Scheduled Call Date and will not cover the period from one year after the Class A-1
Scheduled Call Date to the Maturity Date
."

Thanks then going by above there is a risk of capital loss (due to forex exchange) even for class A if it is redeemed at maturity date. Noted.
 

pohw0008

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did you follow the same steps as what instructions on SSB website?

they wouldn't know whether your CDP got DCS or not because you are required to key in your CDP account at the time of application. so they wouldn't even know your CDP account number
I follow the video don't have options to click on ssb after clicking invest..

 

pohw0008

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did you link your cdp to the bank? not sure if that's needed.
I think my cdp account not ready yet.. just applied yesterday.. but the account number is available so still can apply for astrea..
 

sohguanh

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I follow the video don't have options to click on ssb after clicking invest..
You mention using internet browser AND dbs,posb mobile app all don't have that option? Can you screenshot and mask out some confidential info and show ?
 

reddevil0728

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I follow the video don't have options to click on ssb after clicking invest..

in DBS/POSB website ibanking did you do the following steps:

Invest > Singapore Government Securities (SGS)

Under I want to apply for. you don't see SSB?
 
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vsvs24

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Thanks then going by above there is a risk of capital loss (due to forex exchange) even for class A if it is redeemed at maturity date. Noted.
Not true. Class A1 will not have capital loss at redemption because it is denominated in SGD.

Eg I am alloted SGD15,000. At redemption I get back SGD 15,000.
 
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my thought process still on risk of interest rates spiking, don't think astrea 7 has much room to move up at 4-6% yield.

also most of this fund i think concentrated on US investments which will compound the problem when rates spike

generaly my bonds doign badly too, intend to cut most by mid this year.

astrea 6 already trading below par i think?
think astrea 7 class A will trade above par... thinking maybe 1.03-1.06. but this is based on existing market condition. will head closer to par after a few more fed hikes.
 

lzydata

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Thanks then going by above there is a risk of capital loss (due to forex exchange) even for class A if it is redeemed at maturity date. Noted.

You have asked some leading questions and taken my answers to be what you want them to be. Alright then :LOL:

Not true. Class A1 will not have capital loss at redemption because it is denominated in SGD.

Eg I am alloted SGD15,000. At redemption I get back SGD 15,000.

No, what he is saying is that despite all of Astrea's protections such as reserve accounts, they do not call the class A bonds in 5 years' time and pay higher interest and only redeem upon maturity, and there is USD currency risk because there is no hedging for them.

Which is not exactly true. Class A bonds are SGD bonds. They have to pay the interest in SGD. Likewise for maturity - Astrea cannot say, well we have no more hedging and now your bond is only worth SGD999, take it or leave it. That is tantamount to defaulting.

Don't come up with this peculiar scenario and say this is possible, oh no, what about this risk.

Another point is that if they do not call in 5 years' time, it means the underlying PE investments are in trouble. However, as their modelling shows, they are very highly likely able to pay the interest and redeem upon maturity even if their portfolio is stressed.
 
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ctan84

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Thanks then going by above there is a risk of capital loss (due to forex exchange) even for class A if it is redeemed at maturity date. Noted.
Uncle you know what u r talking or not? Or u totally dun get how bond works?
 
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