There was much media coverage of this Temasek Bond to be issued by Temasek Holdings Private Limited. Temasek Holdings even put up a full-page advertisement in The Straits Times. Temasek Bond is purely a corporate bond with fixed interest payment semi-annually at 2.70% per annum. It matures 5 years later on 25 October 2023 with repayment of principal sum (subject to early redemption and cancellation).
One risk, as in any corporate bond, is the default risk should Temasek Holdings goes into financial difficulties in the future (if it ever happens). In this regard, credit rating of Temasek Holdings is AAA/Aaa by S&P Global Ratings and Moody’s Investors Service respectively.
In the past, small time investors would not be able to subscribe to Temasek Bonds. The institutional, accredited and other specified investors were the ones investing in these bonds. Unless you have at least S$250,000 to invest and depending on your luck, you cannot get a hand on them. For this new Temasek T2023-S$ Bond, Temasek Holdings is opening $200 million for the retail investors with minimum investment of S$1,000.
I would think that Temasek Bond would be oversubscribed with balloting for the retail investors. If one has excess cash sitting idle in the bank, 2.70% interest rate is attractive. One could sit out 5 years for the bond to mature and collect the full invested amount at the end (provided Temasek Holdings does not default on it).
Temasek Bond is expected to be traded on SGX-ST Main Board from 26 October.
Copyright © 2018, limkimtong for Living Investment
The material presented is intended to be general and written in layman’s language as much as it is possible. The author shall not be liable for any direct or consequential loss arising from any use of material written. Please seek professional advice from your financial advisor or financial institutions on material written covering financial matters.