[Official] ** Astrea VII PE Bond **

pohw0008

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Just as it says, Astrea 7 can redeem the bonds in May 2027, 5 years after, but if they do not, they will pay 5.125% pa interest, 1% pa more, from 2027-2032. Interest payments are semi annual, in May and Nov. In May 2032 they have to redeem.
So what's the chance of them redeeming the bond in 5 years?? What's the condition for them to redeem in 5 years.. 10 years seem abit long..
 

lzydata

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So what's the chance of them redeeming the bond in 5 years?? What's the condition for them to redeem in 5 years.. 10 years seem abit long..
I will say there is a very high chance to the point where it can be considered the expected outcome, because there is the step-up interest of 1% pa if they do not. It is penalising.

Average vintage year for the Astrea 7 portfolio is also 5.3 years which for PE means it is already time to mature and cash flows to come in.

Lastly, you can see in the prospectus that they have got their consultant to simulate year 5 and year 10 outcomes, using various stress scenarios, and the likelihood that class A bonds can be redeemed at year 5 is like 100%.
 
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sohguanh

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I will say there is a very high chance to the point where it can be considered the expected outcome, because there is the step-up interest of 1% pa if they do not. It is penalising.

Average vintage year for the Astrea 7 portfolio is also 5.3 years which for PE means it is already time to mature and cash flows to come in.

Lastly, you can see in the prospectus that they have got their consultant to simulate year 5 and year 10 outcomes, using various stress scenarios, and the likelihood that class A bonds can be redeemed at year 5 is like 100%.
Can I ask something related? Say you invest SGD $2000 Astrea class A. Then is called at 5th year or say mature at 10th year the bond is redeemed correct? You will get back your initial SGD $2000 capital ? Becuz I understand it is traded in SGX so there is a buy,sell price involved mechanics but when redeem how is it being tabulated ?
 

lzydata

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Can I ask something related? Say you invest SGD $2000 Astrea class A. Then is called at 5th year or say mature at 10th year the bond is redeemed correct? You will get back your initial SGD $2000 capital ? Becuz I understand it is traded in SGX so there is a buy,sell price involved mechanics but when redeem how is it being tabulated ?
When it is redeemed, the principal and last interest payment is just credited to your bank account, you don't need to sell it.
 

sohguanh

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When it is redeemed, the principal and last interest payment is just credited to your bank account, you don't need to sell it.
Thanks. So for class B which is USD denominated means upon redeem there will be a conversion from USD to SGD correct? This indicates there can be a loss in capital of $2000 SGD you put in initially? I am trying to see between class A and B upon redeem how it is different.
 

reddevil0728

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Thanks. So for class B which is USD denominated means upon redeem there will be a conversion from USD to SGD correct? This indicates there can be a loss in capital of $2000 SGD you put in initially? I am trying to see between class A and B upon redeem how it is different.
FX risk lor
 

lzydata

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Thanks. So for class B which is USD denominated means upon redeem there will be a conversion from USD to SGD correct? This indicates there can be a loss in capital of $2000 SGD you put in initially? I am trying to see between class A and B upon redeem how it is different.
Yes, same as the interest payments, through CDP's Currency Conversion Service.

CCY is a conversion and payment service that converts foreign currency cash distributions (e.g. dividends and coupon payments) to Singapore Dollar (SGD) and credit them directly into CDP direct account holder’s active DCS bank account.

If you are a CDP Securities Account holder with DCS, the CCY is automatically provided. No action is required from you.

You will also have the option to opt-out any time.


https://www.sgx.com/cdpfaqs
 

sohguanh

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I don't know leh.. my dbs iBanking no option to buy ssb... Or maybe i just don't know..
This is Astrea thread. If you talking about SSB using DBS,POSB try the internet browser login not the DBS,POSB mobile app
 

sohguanh

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Yes, same as the interest payments, through CDP's Currency Conversion Service.

CCY is a conversion and payment service that converts foreign currency cash distributions (e.g. dividends and coupon payments) to Singapore Dollar (SGD) and credit them directly into CDP direct account holder’s active DCS bank account.

If you are a CDP Securities Account holder with DCS, the CCY is automatically provided. No action is required from you.

You will also have the option to opt-out any time.


https://www.sgx.com/cdpfaqs
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?
 

reddevil0728

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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?
based on fx risk yes.
 

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.
 
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