Tuesday, 1 September 2015

Current Yield Preference shares/bonds in the market

Thinking of buying sgs bonds? Here's just a simplified table of the 'yield to call' (assuming they get redeemed at their optional callable date at par) on the other corporate bonds, prefs that are available in the market currently

It's mostly useful if you have
  1. Holding power
  2. Just want to park cash somewhere until maturity
  3. Take on a bit more risk, and lock in your money at a higher rate and lower 'maturity' date than the sgs bonds



My own personal take
  1. We may probably see more last grasp attempts of more companies issue bonds before rate rises
  2. Which means yields on the current issuance may get more attractive.
  3. Case in point: Genting Perps dropped a whopping 8% since aspial launched its new bonds
  4. Even so its always good to pick up some of these to give yourself a peace of mind if you are able to hold to maturity
  5. OCBC 5.1% matures in 3 years and has a YTC of 3.48%, not too shabby when you compare it with a fixed d
  6. I only invest if the cash yield is at LEAST 1% higher than my cost of funds.
Anyone else have some of these in your portfolio? Any thoughts on adding to them now in times of volatility or waiting on the sidelines for yields to get more attractive when I/R increases?

3 comments:

  1. I'll also add in the capital loss/gain into the returns too, to find out which is the best buy. Personally, I didn't get any of these, but I'm managing my parent's money so I've quite a few of the mentioned bonds/pref shares.

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  2. They are already included in the returns (assuming they get called at par at their optional callable date) cheers!

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