CapitalMall Trust 3.08%

[Some-one]

coincidentally suntec reit also issued an mtn due 2020 @ 3.35% today.

http://infopub.sgx.com/Apps?A=COW_Corpor...vi3evmSytY

Traded in minimum sum of $250K?

I think that is too much and it also did not say that it is available for retail investor. I would consider the 3.08% bond from CapMall Trust as the equity market is quite high now and I am unable to find any undervalue stocks at the moment.

I hope more fixed income can be made available to retail investors with a lower minimum sum to balance out our portfolio.

[Layman A]

Why Capitamall keeps raising money ?
IIRC, there is so many rounds of MTN in the past 2 to 3 years.
Are they preparing to swallow a big one ?
( Like ION Orchard from CMA ? )

If they are sincere enough, should set the yield equal to institute investor, why always short change the retail investors ?

[CityFarmer]

sometimes good to have some bonds(say 10-25% of portfolio), in times of bear market equities can trade at a big discount whereas you might be able to sell off your bonds at par value and use the $$$ to purchase cheap blue chips ^_^

I followed Peter Lynch approach, with 100% in equity. But I do respect the decision for those invest in bonds.

IMO, the best approach to invest in bonds now, with the likelihood of interest hike, is similar as ladder bond funds. Those funds invest in bonds with different maturity dates, thus to minimize interest-rate risk and to increase liquidity. Mr. Salleh from 2ndChance did the same for the company "spare cash" with similar approach.

[valuebuddies]

coincidentally suntec reit also issued an mtn due 2020 @ 3.35% today.

http://infopub.sgx.com/Apps?A=COW_Corpor...vi3evmSytY

tiny player like myself cannot buy...

[BeDisciplined]

Hi,

What is the difference between Suntech Note issued at 3.35% (min S$250,000) vs CapitaMall Trust Bond. I know bond. But what is Note? Can it be sold before maturity? If it is tradable, which platform? In the event of liquidation, what priority does Note have? Please educate. Thanks

[AlphaQuant]

What is the difference between Suntech Note issued at 3.35% (min S$250,000) vs CapitaMall Trust Bond. I know bond. But what is Note? Can it be sold before maturity? If it is tradable, which platform? In the event of liquidation, what priority does Note have? Please educate. Thanks

MTN stands for Medium Term Note. http://www.investopedia.com/terms/m/mtn.asp

Normally a firm will establish a MTN scheme with a bank, under which the bank will underwrite its bond issuances. E.g. Company establishes 1bio MTN issuance with Bank, under which it can issue 10 100mio bonds at anytime. Generically you can imagine a MTN issue to comprise of many separate bonds.

Most bonds issued under the MTN schemes are only available in the Over The Counter (OTC) market in denominations of 100-250k per pop. Investor needs to call up your RM to buy/sell the bonds. (e.g. the Suntec Issue)

The CapMall issue will be available to retail meaning it can be transacted over SGX like any shares.

Bonds have priority over shares on liquidation but different bond issuances have different convenants/priorities - read the finelines.

[AlphaQuant]

Why Capitamall keeps raising money ?
IIRC, there is so many rounds of MTN in the past 2 to 3 years.

If they are sincere enough, should set the yield equal to institute investor, why always short change the retail investors ?

There is plenty of MTN issuances going on all the time - just that the retail blokes are not aware of them.

I think this CapMall issue is somewhat fairly priced, albeit somewhat unattractive.
The only incentive for CapMall to do a retail offering is prob to flash its brandname - the CapitaLand group seems to be very keen to promote its brand all the time.

From CapMall POV, it spends more money doing the paperwork, engaging the banks to use the ATM, but it gets away with a somewhat lower coupon and gets investor recognition with its name. So net small win taking into account intangibles.

From the retail POV, it's one more option in a very scarce market for retail bonds, albeit at somewhat unattractive rates for rising rate environment. So net win simply due to lack of options in a low saving rates environment (savers-repression).

Fro the banks - it's fees galore. So net win for sure.

[Layman A]

Why Capitamall keeps raising money ?
IIRC, there is so many rounds of MTN in the past 2 to 3 years.

If they are sincere enough, should set the yield equal to institute investor, why always short change the retail investors ?

There is plenty of MTN issuances going on all the time - just that the retail blokes are not aware of them.

I think this CapMall issue is somewhat fairly priced, albeit somewhat unattractive.
The only incentive for CapMall to do a retail offering is prob to flash its brandname - the CapitaLand group seems to be very keen to promote its brand all the time.

From CapMall POV, it spends more money doing the paperwork, engaging the banks to use the ATM, but it gets away with a somewhat lower coupon and gets investor recognition with its name. So net small win taking into account intangibles.

From the retail POV, it's one more option in a very scarce market for retail bonds, albeit at somewhat unattractive rates for rising rate environment. So net win simply due to lack of options in a low saving rates environment (savers-repression).

Fro the banks - it's fees galore. So net win for sure.

Almost forget to thank you for the explanation on this one, AlphaQuant

[pianist]

what do u think will be the balloting ratios be like?

[felixleong]

what do u think will be the balloting ratios be like?

"In January 2011, CapitaMalls Asia (CMA) Treasury Limited issued a 1-year bond paying 1% coupon and
3-year bond paying 2.15% p.a. coupon in Singapore, targeted at retail investors. The combined public tranche was 1.8 times oversubscribed. CapitaMall Trust also followed suit shortly and issued a 2-year bond paying 2% p.a. coupon shortly after and likewise meet with strong demand. Apart from CMA Treasury and CMT issues, there have been other corporate bond issues in Singapore targeted at retail investors. Singapore Airline's October 2010 offer and Fraser & Neave's March 2011 offer were also met with overwhelming response."


base on past info, i think CMT 3% will be 1.5-2.5 times oversubcribed. Good luck pressing from ATM ^_^