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24 replies to this topic | 125 praises

#1

Posted 30 March 2016 - 12:57 PM

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A new Bond is being issued in Singapore.  Let's not start with the James Bond jokes.

https://secure.funds...39_yrmJoeyM9Py7!1867248078?DCSext.dept=21&WT.mc_id=58861&issueCode=JK5852351

 

I like the rate but as I don't undestand bonds I won't be investing.

 

As I understand it although the coupon rate is 5.3% annually the price of the bond can go down as well.

 

So at the end of the investment period money can be lost.

Is that correct?

 

Or can anyone provide a simple short version of how a bond works.


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#2

Posted 30 March 2016 - 01:01 PM

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Basically it's a loan to the business

Bond return is inversely related to the interest rate
Basically it's a loan to the business

Bond return is inversely related to the interest rate
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#3

Posted 30 March 2016 - 01:01 PM

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moved folder as some individuals have serious problems in right siting.

 

that said, placing it in lite n ez, opens the pandora's box to James Bond jokes

 

nuff said.  The kinds of induhviduals tht need to be managed in forums



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#4

Posted 30 March 2016 - 02:56 PM

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A new Bond is being issued in Singapore.  Let's not start with the James Bond jokes.

https://secure.funds...39_yrmJoeyM9Py7!1867248078?DCSext.dept=21&WT.mc_id=58861&issueCode=JK5852351

 

I like the rate but as I don't undestand bonds I won't be investing.

 

As I understand it although the coupon rate is 5.3% annually the price of the bond can go down as well.

 

So at the end of the investment period money can be lost.

Is that correct?

 

Or can anyone provide a simple short version of how a bond works.

 

You're quite right to say that the price of bond will likely go down as it nears it's maturity date.

 

However, at the end of the investment period (or at maturity), the face value of the bond will be return to you... so if you purchased the bond right at the start when it was issued(e.g. $1 per unit with coupon rate 5% & maturity of 5 yrs) & you purchased $1M. Every year you'll get 50k as interest & if you hold till maturity, you'll get back your $1M on top of the 250k of interest collected during these 5 yrs. Of course if the bond price goes up during the 5 years, you can sell off & gain capital appreciation... if the price goes down, just hold till it mature lor. Worst case scenario is the company bankrupt...

 

You can refer to this page from fundsupermart for better explanation on how bond works:

https://secure.funds...’s-a-bond-10102

 

Except for those that open to small retail investors like the recent one appearing on the papers from Aspial (which i think is the one you referring to) where you can buy as low as few thousands $, most of the bonds would required min investment of $250k which most of us don't have the spare cash to lock for such a period of time....


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#5

Posted 30 March 2016 - 03:08 PM

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You're quite right to say that the price of bond will likely go down as it nears it's maturity date.

 

However, at the end of the investment period (or at maturity), the face value of the bond will be return to you... so if you purchased the bond right at the start when it was issued(e.g. $1 per unit with coupon rate 5% & maturity of 5 yrs) & you purchased $1M. Every year you'll get 50k as interest & if you hold till maturity, you'll get back your $1M on top of the 250k of interest collected during these 5 yrs. Of course if the bond price goes up during the 5 years, you can sell off & gain capital appreciation... if the price goes down, just hold till it mature lor. Worst case scenario is the company bankrupt...

 

You can refer to this page from fundsupermart for better explanation on how bond works:

https://secure.funds...’s-a-bond-10102

 

Except for those that open to small retail investors like the recent one appearing on the papers from Aspial (which i think is the one you referring to) where you can buy as low as few thousands $, most of the bonds would required min investment of $250k which most of us don't have the spare cash to lock for such a period of time....

 

Not go down la. More like head towards the par value ($1). But that also depends on whether or not the market thinks the company is going to default.


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That is all.

#6

Posted 30 March 2016 - 03:19 PM

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do analyse the company BS and understand why the company cannot raise funds from regular debt or equity

 

possible reasons are that they are already in huge debts with assets tied up, or their debt will be more costly than the bond's coupon, or the restrictive debentures from a debt funding 

 

next question is why the company cannot borrow from bank's at a rate lower than the coupon, which at 5.3% is not that difficult to obtain for a creditable business

 

the risk is default or bankruptcy, like the recent case from Indonesia Trikomsel

 


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#7

Posted 30 March 2016 - 03:51 PM

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Didn't bother to fix the link but looking at the 5+% mentioned, this is referring to Aspial's second launch?

 

Would avoid or consider the first launch as a better alternative if die die want to be vested in this corp's bonds.

 

4 years seem like a short period of time but plenty can happen to this company that is trying to diversify its business into real estate.

 

If holding power can stretch beyond time horizon of 4 years, should consider discounted 'blue chips' that has a higher yield than 5+% (and sound fundamentals).

 

Do your due diligence, good luck.


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#8

Posted 30 March 2016 - 04:57 PM

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If holding power can stretch beyond time horizon of 4 years, should consider discounted 'blue chips' that has a higher yield than 5+% (and sound fundamentals).

 

Do your due diligence, good luck.

 

I'd be interested if you can tell me of a few 'blue chips' with higher yield than 5.3%

 

Just for my information and consideration.

Thanks.


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#9

Posted 30 March 2016 - 09:13 PM

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5++% with 5 yr maturity
Retail tranche? Minimum $1k
Smart issuer, cut the pie into very small pieces to lure all the small timers with small money.
Aspial or the former leehwa is now also a property developer and a pawnshop.
Its all about risk return perspective.

Company is high debt and has quite a handful of property unsold.
But the traditional jewellery business is ok and the pawnshop is ok.
However economy is soft so there might be further impact.

Nothing is perfect. If you can accept the name and receive 5% pa for lending money to them, then buy it.

If i were to buy, i would take the earlier issue which matures in 2019 and still gives 5%pa ++
The catch? Thats the AI issue which requires a minimum size of $250k

If i were the investment banker i will also go retail and let the folks oversubscribe this one.
Upsize the deal to $150mil
Then Use the proceeds to repay the ones maturing 2016 and 2017.
Refinancing done until 2018.
Whoopee.

Porker, you say leh?
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#10

Posted 31 March 2016 - 11:36 PM

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5++% with 5 yr maturity
Retail tranche? Minimum $1k
Smart issuer, cut the pie into very small pieces to lure all the small timers with small money.
Aspial or the former leehwa is now also a property developer and a pawnshop.
Its all about risk return perspective.

Company is high debt and has quite a handful of property unsold.
But the traditional jewellery business is ok and the pawnshop is ok.
However economy is soft so there might be further impact.

Nothing is perfect. If you can accept the name and receive 5% pa for lending money to them, then buy it.

If i were to buy, i would take the earlier issue which matures in 2019 and still gives 5%pa ++
The catch? Thats the AI issue which requires a minimum size of $250k

If i were the investment banker i will also go retail and let the folks oversubscribe this one.
Upsize the deal to $150mil
Then Use the proceeds to repay the ones maturing 2016 and 2017.
Refinancing done until 2018.
Whoopee.

Porker, you say leh?


Porker

Calling pager

#11

Posted 01 April 2016 - 02:00 AM

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5++% with 5 yr maturity
Retail tranche? Minimum $1k
Smart issuer, cut the pie into very small pieces to lure all the small timers with small money.
Aspial or the former leehwa is now also a property developer and a pawnshop.
Its all about risk return perspective.

Company is high debt and has quite a handful of property unsold.
But the traditional jewellery business is ok and the pawnshop is ok.
However economy is soft so there might be further impact.

Nothing is perfect. If you can accept the name and receive 5% pa for lending money to them, then buy it.

If i were to buy, i would take the earlier issue which matures in 2019 and still gives 5%pa ++
The catch? Thats the AI issue which requires a minimum size of $250k

If i were the investment banker i will also go retail and let the folks oversubscribe this one.
Upsize the deal to $150mil
Then Use the proceeds to repay the ones maturing 2016 and 2017.
Refinancing done until 2018.
Whoopee.

Porker, you say leh?

 

I'm not an expert leh but let me try my best.

 

I won't touch Aspial's bond. The property unit World Class Land is quite a joke. I had the opportunity to peep into the workings of the company and it is as expected a company run on cronyism. The property unit, run by amateurs, masquerades as a high end wannabe developer. Take a look at the advertisements for the Australia 108 development and you will see what I mean. No high end developers market their high end products in that sort of amateurish "upgrader attention seeking" sort of way.

 

The jewellery and Maxi cash businesses may be doing alright now but both are still very localised mass market retail businesses with not much potential for top line growth.

 

I see this bond offering as a way of paring down debt more for it's property unit. I may be wrong so don't slam me.

 

:a-fun:


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#12

Posted 01 April 2016 - 02:21 AM

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And one more off tangent thing to add on Aspial. This company was started by the Koh family. If Koh Wee Meng were to issue bonds for the Fragrance Hotel business then I'd say please go ahead and buy.

 

That business model has got to be one of the most brilliant thing ever to happen in Singapore. How the hell can you run a budget hotel but charge close to 5 star room rate per day? By leasing to horny people on a 2 hour basis. Occupancy rate probably close to 100%  :a-fun:  :a-fun:  :a-fun:

 

Can't expect run lion couples or hookers to f*ck in Gardens by the Bay right?  :ph34r:


Edited by Porker, 01 April 2016 - 02:22 AM.

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#13

Posted 01 April 2016 - 08:49 AM

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And one more off tangent thing to add on Aspial. This company was started by the Koh family. If Koh Wee Meng were to issue bonds for the Fragrance Hotel business then I'd say please go ahead and buy.

That business model has got to be one of the most brilliant thing ever to happen in Singapore. How the hell can you run a budget hotel but charge close to 5 star room rate per day? By leasing to horny people on a 2 hour basis. Occupancy rate probably close to 100% :a-fun: :a-fun: :a-fun:

Can't expect run lion couples or hookers to f*ck in Gardens by the Bay right? :ph34r:


That depends. Some atas folks love elevated "bond-ing" session. Elite bro Enye may know better...

#14

Posted 01 April 2016 - 11:27 AM

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I'm not an expert leh but let me try my best.

 

I won't touch Aspial's bond. The property unit World Class Land is quite a joke. I had the opportunity to peep into the workings of the company and it is as expected a company run on cronyism. The property unit, run by amateurs, masquerades as a high end wannabe developer. Take a look at the advertisements for the Australia 108 development and you will see what I mean. No high end developers market their high end products in that sort of amateurish "upgrader attention seeking" sort of way.

 

The jewellery and Maxi cash businesses may be doing alright now but both are still very localised mass market retail businesses with not much potential for top line growth.

 

I see this bond offering as a way of paring down debt more for it's property unit. I may be wrong so don't slam me.

 

:a-fun:

 

Good analysis. I will say that property is on the downward trends and will recover next year if govt ease up the laws on the ABSD.

 

Btw, are you the porker whom I read before that imported his own BMW manual years back? :)
 


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#15

Posted 01 April 2016 - 12:03 PM

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genting got a retail perpetual also mah at 5%+


Pursuant to section 49, subsection 7e, paragraph a...

#16

Posted 01 April 2016 - 06:26 PM

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genting got a retail perpetual also mah at 5%+


Perp? Genting?
Mai lah

#17

Posted 01 April 2016 - 06:39 PM

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moved folder as some individuals have serious problems in right siting.

 

that said, placing it in lite n ez, opens the pandora's box to James Bond jokes

 

nuff said.  The kinds of induhviduals tht need to be managed in forums

 

You can be pundek Bond.

 

"The names Pandu. James Pandu." :D

 

Unfortunately, you look much more like a pundek Oddjob. [laugh]


I'm not an expert leh but let me try my best.

 

 

 

I know your sexpertise is in a w-hole-y different kind of BONDage.  :a-fun:


Edited by Turboflat4, 01 April 2016 - 06:37 PM.

We live in a primitive time, don't we, Will? Neither savage nor wise. Half measures are the curse of it; any rational society would either kill me or put me to some use.

#18

Posted 01 April 2016 - 06:40 PM

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Perp? Genting?
Mai lah

 

But people always say dun bet against casino leh.


That is all.

#19

Posted 01 April 2016 - 10:31 PM

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a lot people buying this bond, peasant me no $ to buy :a-m1524:

 

Aspial Corporation

Aspial Corporation's second retail bond offering of four-year, 5.3 per cent bonds had an overall subscription rate of approximately four times the original offer size of $75 million.

 

The public offer of $50 million, which closed on March 30, received $254 million of valid applications, representing a subscription rate of five times the original offer size.

 

 

 


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#20

Posted 01 April 2016 - 10:54 PM

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Not specific to the Aspial bond that TS is interested in... but one information that does not seems to have been mentioned is that in case liquidation, bondholders rate higher in the hierarchy of claimants to whatever is left of the company funds than stock holders.

 

So, at least it cold comfort that bond holder still get some money back until the pool dries up.




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