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Tuesday, 12 May 2015

Frasers Centrepoint raising S$200m from bond issue. What you need to know if you are applying.

Frasers Centrepoint raising S$200m from bond issue. What you need to know if you are applying.

For starters, it will be good for you to know how Bond Price Move even though in this application you will get it at par value.

Bonds are generally issued in multiples of $1,000, also known as a bond's face or par value. But a bond's price is subject to market forces and often fluctuates above or below par. If you sell a bond before it matures, you may not receive the full principal amount of the bond and will not receive any remaining interest payments. This is because a bond's price is not based on the par value of the bond. Instead, the bond's price is established in the secondary market and fluctuates. As a result, the price may be more or less than the amount of principal and the remaining interest the issuer would be required to pay you if you held the bond to maturity.

The price of a bond can be above or below its par value for many reasons, including:
  • interest rate adjustments;
  • whether a bond credit rating has changed;
  • supply and demand;
  • a change in the creditworthiness of a bond's issuer;,
  • whether the bond has been called or is likely to be (or not to be) called; or,
  • a change in the prevailing market interest rates.
If a bond trades above par, it is said to trade at a premium. If a bond trades below par, it is said to trade at a discount. For example, if the bond you desire to purchase has a fixed interest rate of 8 percent, and similar-quality new bonds available for sale have a fixed interest rate of 5 percent, you will likely pay more than the par amount of the bond that you intend to purchase, because you will receive more interest income than the current interest rate (5 percent) being attached to similar bonds.
- See more at: http://www.finra.org/investors/bond-basics#sthash.3GbDfoSb.dpuf

Next, you need to read up on what you are buying. Please do not buy because everyone say can Buy or Not.

Read the proper announcement.


If you got any Questions which you need accurate confirmation or answers,

For media queries, please contact:

 Frasers Centrepoint Limited

Gerry WONG / Karina CHOO / SIEW Lay Eng
Tel: +65 6277 2679 / +65 6277 2677 / +65 6277 2678
E-Mail: fclgroupcomms@fraserscentrepoint.com

In General, for this Frasers Centrepoint bond issue,

Only Apply if you can lock in for 7 years. 
1.apply from atm like ipo or ibanking
2. minimum $2000 for retailer
3. coupons will be issued into the bank account by default semi annually
4. after 7th year you won't receive coupons from the bond you hold and you have to redeem back from the issuers or sell into the bond market.
5. Additional info from Chang Han Thomas
Kenji, need to add that u can bid a min of 2k, thereafter multiples of 1k. That means can bid of 2k, 3k, 4k, but not 4.5k or 2.2k
6. Opens now till 20th May 12pm, with a minimum of $2000, and subsequent increase of $1000 thereafter.
7. Date of Trade 25th May.

One more thing to add : just like IPO, need to pay a little transaction fee to the bank. Also need a CDP account if not,you can't apply. from Chang Han Thomas

So the main idea is not to apply it at the last minute so you have enough time to rectify any issue with the application.

Redemption Part

1. Automatic redemption. 2. You'll get the standard sgx announcement that such and such bonds are redeemed back. 3. Auto refund back to your bank account 4. (if the issuer choose to redeem early) starting from the 4th year , your yield would actually be 3.85% from the earliest with gradual decrease to 3.65% by 2022. 5. For every $1 bond, if you redeem on the 4th year on 22nd May 2019, you get a total of 8 coupon payments of $0.01825 each. So the total coupon payments is $0.01825*8 = $0.146. You will redeem back at $1.01825, so you make a capital gain of $0.01825. In total, you get 0.01825 + 0.146 = $0.16425 over 4 yrs. Your returns is therefore 0.16425/1 x 100% divided by 4 yrs = 4.10625% pa source from my facebook discussion with .Chang Han Thomas

Lastly, is it suitable for everyone?

The yield and returns are easy to beat if you are savvy in investment.

This product is suitable for people who want a peace of mind and have a plan 7 years later for that ROI.

Like what me and 
Chang Han Thomas agrees on.

Always do what you are good at and make more money from it.

Then you can use other vehicle to let that money work for you in returns.

Invest and Apply Safely Everyone.

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