Hyflux 6% CPS 10 - Preference Shares with the highest yield

• Current Price = $107.50
• Interest = $6 per share
• Yield = 5.58%

Investment till Callable Date

• Tenure = 6 years
• Total Interest = $36 per share
• Capital Loss = $7.50
• Overall Yield = 4.42%
• Interest Rate after Callable Date = 8% (Assuming they don't redeem at callable date)

This is one preference shares which gives a very high yield of 5.58% but if you look at the premium and looking at a 6 year tenure, the overall yield is only 4.42%. One good thing is that its interest rate after callable date is 8% which is very high but I doubt that they will do that. Probably they will issue another preference shares to pay off this one.

Looks like this is a good deal because it is the highest that we have in Singapore but it is also one with the highest risk because Hyflux is not a bank but a water-treatment company. Therefore, it depends on whether the business is stable and whether they can generate cashflow from its operations.