Singapore SGS Bond

[BBCWatcher]

In my view N522100N very likely isn't interesting unless you're already holding $200,000 worth of Singapore Savings Bonds or unless you're speculatively betting that SGS rates will fall rather substantially and quickly (and thus you plan to sell this bond at a higher price on the secondary market). This month's SSB is offering 1.82% in its first 3 years (which will probably slightly beat N522100N if the auction echos current market interest rates), it offers monthly liquidity with guaranteed principal plus accrued interest, and you have the option to hold longer than 25 months. Also, you can buy SSBs in $500 increments (instead of $1,000 increments for N522100N). However, there's a $2 transaction fee to buy a SSB (and to redeem one before maturity), whereas buying N522100N in an auction doesn't involve any fees. (Selling it on the secondary market before maturity would.)

 

[terry2005]

Don't overthink this.

This auction is for a bond (N522100N) that pays about $14.38 every 6 months (on March 1 and September 1)(*) until maturity on September 1, 2027, when it (also) pays back face value ($1,000). What's a government bond like that currently worth? Something above $1,000 (to be decided in this auction), because ~$14.38 every 6 months is rather a lot these days.

It's really that simple. Any questions?

(*) The coupon payments alternate between $14.38 and $14.37.

In simple terms, it could meant paying $1024.20(depending on auction) to buy $1000 (fixed) with $14.37/8(fixed) interest every 6 month. Right?

 

[BBCWatcher]

In simple terms, it could meant paying $1024.20(depending on auction) to buy $1000 (fixed) with $14.37/8(fixed) interest every 6 month. Right?

Yes, currently $1,02X.YZ seems like a reasonable final auction price for N522100N with X being a low number. ($1,024.20 seems a little high/YTM too low, but we'll see.) Note that you may have to pay $1,150 up front (15% above face value) to participate in the auction, but then you'll quickly get back the difference between $1,150 and the auction price after the auction (assuming your bid is successful).

Of course you can bid for essentially as much as you want, in $1,000 (face value) increments. If for example you want to bid 1.5% YTM for $500,000 (face value) and 1.6% YTM for another $500,000 (face value), you can if you have the cash. You'd need $1.15M (total) to place those two bids.

 

[reddevil0728]

U mean select competitive bid??

are you planning to do comp bid or non comp? do you know what's the difference?

 

[terry2005]

are you planning to do comp bid or non comp? do you know what's the difference?

Yup. Comp bid, if i put 2.6%, the deal won't go thru if the results is lower than 2.6 and the money will be refunded

 

[reddevil0728]

Yup. Comp bid, if i put 2.6%, the deal won't go thru if the results is lower than 2.6 and the money will be refunded

Yep

 

[lzydata]

Auction: N522100N 2-Year Bond (Reopened)​

Allotment​

Total Amount Allotted S$2.9 billion
Amount Allotted to Non-Competitive Applications S$474.7 million
Amount Allotted to MAS S$300.0 million
Total Amount Applied S$7.5 billion
% of Competitive Applications at Cut-off Allotted Approximately 44%
% of Non-Competitive Applications Allotted 100%
Bid-to-Cover Ratio 2.59

Yield and Price​

Cut-off Yield 1.67% p.a.
Cut-off Price 103.652
Median Yield 1.6% p.a.
Median Price 103.798
Average Yield 1.56% p.a.
Average Price 103.881

https://www.mas.gov.sg/bonds-and-bi...nds?issue_code=N522100N&issue_date=2025-08-01

 

[bruiser69]

So low. Lidat might as well go for CImb Fastsaver account

 

[reddevil0728]

So low. Lidat might as well go for CImb Fastsaver account

Guaranteed for 2y?

 

[sglandscape]

Guaranteed for 2y?

People often forget about how interest rate works

 

[DevilPlate]

Guaranteed for 2y?

Lock in 2y at 1.67%

 

[reddevil0728]

Lock in 2y at 1.67%

i think you missing my point

 

[DevilPlate]

i think you missing my point

U missing his/her point too.

1.67% is too low to lock in for 2y

 

[reddevil0728]

U missing his/her point too.

1.67% is too low to lock in for 2y

but that's not the point i am trying to make about his/her point

 

[DevilPlate]

but that's not the point i am trying to make about his/her point

If u didn’t miss his/her point, then u would not have made that reply/comment liao

 

[reddevil0728]

If u didn’t miss his/her point, then u would not have made that reply/comment liao

why not? we are in SGS bond thread. not CImb Fastsaver thread

 

[bruiser69]

Guaranteed for 2y?

Works both ways. Cimb rates can both go up and down. Like we are right now seeing Fed reluctance to lower interest rates. Who knows Powell may even raise rates again instead in the near future? But if you are tied to the SGS bonds. You are stuck at 1.67% for the 2 years.

 

[reddevil0728]

Works both ways. Cimb rates can both go up and down. Like we are right now seeing Fed reluctance to lower interest rates. Who knows Powell may even raise rates again instead in the near future? But if you are tied to the SGS bonds. You are stuck at 1.67% for the 2 years.

I know.

that’s why not comparable give it serves different purposes

 

[bruiser69]

I know.

that’s why not comparable give it serves different purposes

Different strokes for different folks. No right no wrong. For me, when I compare the rates that the SGS bonds are now paying versus other bank deposit rates, I would straightaway give the SGS bonds a miss. No brainer

 

[reddevil0728]

Different strokes for different folks. No right no wrong. For me, when I compare the rates that the SGS bonds are now paying versus other bank deposit rates, I would straightaway give the SGS bonds a miss. No brainer

different strokes for different folks is talking about "different things appeal to different people.".

i am not talking about who it appeals to. i am just saying it's not comparable to say that "oh SGS bond yield so low, hence I will go with a higher yield account without guarantee".

it doesn't connect and not comparable. i am just saying something is comparable whether they are very similar product but one offers a higher yield than the other. sure comparable.

but this is a separate issue from what is more attractive to an individual. that 1 yes is different strokes for diff folks.