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Yes good brother. US$200K or S$250K is a big chunk of money for most of us. Most bonds in secondary market are in such denominations and they offer better coupons and variety than retail bonds, given the same price. In Chinese, it' s called 穷 人 吃 贵 米 , the poor pay more fortheir rice because they cannot afford to buy in big sacks.
- The poor saved to buy their retail bond or their first secondary market bond in full. They fork out $250K for a $250K bond.
- The rich buys their bonds with leverage. They probably fork out S$50k for a S$250K bond but the risks are there. Only choose the safest bonds for leverage. (I don' t encourage bond leverage)
- The super-rich probably pay almost zero-deposit* for a $250K bond, except a life insurance with the bank as beneficiary.
* Allow me to use an USD Bond issued last week as example. If i remember correct, Bank of China issued some bonds at FLOATING RATE 0.77%+3M-Libor last week. You would agree that Bank of China is a very safe bank and private banking clients can get financing for the bonds at maybe 0.3%+3M-Libor. Since it is floating-rate, the rich client will never lose money, unless Bank of China collapses. For the RM, they make money from the 0.3% premium regularly + the commission for the placement of the bonds. The rich clients just need to sign on the line and everyone can print money out of thin air.
PS - Usually, floating rate bonds offers very low yields but are highly sought-after by clients who pegged their leveraged positions with the same interbank rates.
john_ric ( Date: 08-May-2017 12:44) Posted:
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if thinking of investing...look at fundsupermart..they sell corporate bonds too. Rather than buy from banks because the banks bid/ask quote is not very transparent.
go for soverign bonds, by GIC or govt related, temasek, maple tree, hdb
the rest can be quite risky
john_ric ( Date: 08-May-2017 12:44) Posted:
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corporate bond.
needs US200,000.
big chunk of money. like castle in the air--cant reach.
Although the 6.375% coupon is the highest-yielding ever secondary market bond issued by Oxley, Oxley launched a retap of the same issue (The bonds are issued at their original face value, maturity and coupon rate) this morning. So long bondholders are willing to lend them money, they will take it.
Looks like they have limited options of financing at sub 6.375% level right now.
MarcPh ( Date: 13-Apr-2017 14:57) Posted:
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Thanks for sharing, I don' t have any cash for that option.
If u take dbs, when u look at ur statement, although its fixed, adjustments of repayments upwards had also been observed many times henced prompt me to do full settlement.
MarcPh ( Date: 08-May-2017 08:32) Posted:
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Already told u nothg below 1.88% then and its by DBS sinced.
MarcPh ( Date: 08-May-2017 08:32) Posted:
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Final coupon set at 3.75%, making it one of the lowest priced BASEL Tier-2 SGD bonds from Europe in recent memory.
proves that we could be now in the midst of a SGD bond rally.
MarcPh ( Date: 05-May-2017 10:10) Posted:
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hi again, actually i just refinanced at 1.68 fixed 2Y at the end of Apr.
famouspinky ( Date: 06-May-2017 14:53) Posted:
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Already revised 3mths bk.
MarcPh ( Date: 06-May-2017 12:39) Posted:
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those were the rates that my slim waists quoted me last week from UOB and DBS. I am sorry if these rates are not relevant now.
famouspinky ( Date: 06-May-2017 12:20) Posted:
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No 1.58 la. Min 1.88 . Average 2% for fixed rate now.
MarcPh ( Date: 06-May-2017 12:05) Posted:
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Yes, President Trump & Yellen did not hike rates as much as expected, so at this moment, we see very competitive home loan rates (eg. Fixed 2Y for 1.58%, 1.68%) and SGD bonds recovering in year 2017.
takemenow ( Date: 05-May-2017 19:21) Posted:
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The interest rate has dropped as compared with the first issue.
New Issues:
Retail Bonds - We can purchase just like a share IPO.
Secondary Market Bonds - Usually they will announce the books-building in the morning and closes by 2-5 pm depending on demand. The earlier it closes, the better the response, and hopefully it translates to better resale prices (if applicable). You can apply though your bank RM or stock-broker. However, 99% of the remisiers frown at such business or not interested to deal secondary bonds for you because it means that a lof of your $$$ will be locked in bonds which translates to quiet business for them in the months ahead.
Leverage:
Leverage is available for bonds investment, including retail bonds. Many purchased secondary bonds with leverage and hold them in the custodian account of the bank/security firm that provides the leverage. I don' t encourage bond investment with leverage. If you do, don' t be greedy and go for fixed-rates for financing leveraged bonds and choose safer bonds as leveraged investment in bonds can wipe out more than your capital invested. If you purchase new bond issues with bonds, your RM will be very happy because he/she can make their commission from the issuer and your leveraged positions.
If you are very rich, some offers LTV 90% or 100% for extremely safe-debts such a government bonds, effectively you just need to sign on the line and need not fork our any capital. For LTV 100%, some RMs will require you to buy an insurance policy to protect themselves. For the speculator who use LTV 100%, effectively, he is betting that the cost of financing (usually floating rates) will be lower than the coupons of govt-bonds.
Custodians:
Retail Bonds - No custodians required unless you are buying with margin
Secondary Market Bonds - Most SGD issues are with CDP, no custodian required if you don' t use leverage. Some rare SGD issues, eg. Grand China Air 6% SGD Bond are not with CDP (eg. in HK), so you need to hold these shares in a bank or securities firm' s custodian account. Minor charges apply for custodian services.
about application...
retail bond is easy, like applying for ipo.
how about corporate bonds, how to apply?
who will be the custodian if i appy thru banks??
New BASEL Tier-2 issue announced from LBBW
10NC5 - Indicative 4% coupon is marked to Commerzbank (Germany) 10NC5 4.875% SGD bonds (current yield about 4%).
Not very exciting.
MarcPh ( Date: 29-Apr-2017 23:15) Posted:
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One more O&M company going to be down after Swiber, Ezra and Swissco.
MarcPh ( Date: 02-May-2017 08:25) Posted:
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Update: http://infopub.sgx.com/FileOpen/Hyflux%201Q2017%20SGXnet%20announcement.ashx?App=Announcement& FileID=452088
- Tianjin Dagang expected to be disposed
- Hyflux lost $27mio on TuasSpring power (to be disposed) again in the lastest quarter.
As a result, assets held for sale (valued on paper) increased to $1.7bio from $0.43bio.
Expect some NAV drop and huge cashpile after offloading assets.
Cash in hand is about $386mio (last qtr $321mio)
Looks like, Hyflux is continuing to build up their cash, giving up the old ways of flooding the market with ther subordinate-debts:
- For bond investors, Hyflux Perpetual bonds and Preference Shares are expected to be redeemed on their first-call dates. Cost of financing can be reduced to < 4% if Hyflux turns to plain vanilla bonds in future.
- For equity investors, despite the potential drop in NAV due to asset disposals, the huge cashpile (after further assets disposal) appears to be excessive and they can hope for some special-dividends after recent years of dividend-droughts (low dividends).
MarcPh ( Date: 25-Apr-2017 09:35) Posted:
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Marco Polo Marine suspends trading as lenders doubt fund injection
http://www.businesstimes.com.sg/companies-markets/updated-marco-polo-marine-suspends-trading-as-lenders-doubt-fund-injection
MarcPh ( Date: 14-Apr-2017 21:04) Posted:
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