Frasers Centrepoint raising S$200m from bond issue - Channel NewsAsia

Frasers Centrepoint raising S$200m from bond issue - Channel NewsAsia

This is one retail bond which is going to be listed... Finally there is one which we can look into.

• IPO price on 17th May 2015 = S$1.00
• Interest = S$0.0365 per share
• Yield = 3.65%

Investment till Callable Date

• Tenure = 7 years
• Total Interest = $0.2555 per share
• Capital Loss = $0.00
• Transaction Cost = $0.006
• Overall Return = $0.2495
• Overall Annual Yield = 3.564%

Fraser Centrepoint is now raising a new 7 year bond with a coupon of 3.65%. On paper, the published yield seems ok but if you look at investment till callable date, you would realize that it is by far even better than Hyflux 6% CPS preference shares because if you get it at IPO and hold it until maturity, you are not going to lose any capital. For Hyflux, you are still going to lose capital because you are buying at a premium.

There is another bond, Genting SP 5.125% Perp bond which has almost the same maturity as FCL (provided they redeem their bonds) and it is currently having an overall annual yield of 4.062%. Another is CapitaMall Trust 3.08% bond yielding at an overall annual yield of 2.707% maturing one year lesser. Thus, there is quite a number to compare. I would say that the yield is going to be closer than CapitaMall Trust than Genting SP as FCL and CapitaMall Trust are both property related (although one is a developer and another is a REIT)

I have applied for 10 lots and hoping to get some. If I am right than the yield is going to be closer to CapitMall Trust 3.08%, price will go up to about $1.04 at listing. If I am wrong and it is closer to Genting SP 5.125% Perp, the price will go down to $0.98. It is really a 50-50 and I think it is going up. If it really went down, I will buy more on the market.