SIA yesterday announced a tranche of S$50 million SIA bonds for the public.
The bonds, which will be issued in denominations of S$1,000 each, will give interest at the rate of 2.15% p.a. paid semi-annually. The Bonds are expected to be issued on or about 30 September 2010 and will have a term of 5 years from their date of issue.
The minimum subscription is $10k and the application can be done via ATMs of DBS, UOB and OCBC. Application starts today and will end on 28th September at 12 noon.
If you own these bonds, you will be able to sell them in the secondary market on SGX. However, if no one wants to buy/sell, liquidity might be poor.
For more information and risk disclosures, you can refer to the SIA bond offer information statement (OIS) here. Instructions on how to apply for SIA bond via the ATM can also be found inside.
Do note that for bonds, one risk is the risk of the issuer (in this case SIA). If SIA goes bust, it is possible to lose 100% of your investment.
If this SIA bond offer shows high demand, we might start to see more of these offerings by other companies in the future.
Usually, the retail investor in Singapore has limited access to corporate bonds as they require a minimum of $250k.
There are a few stat board bonds (LTA, HDB) listed on SGX in denomination of $10k but liquidity for them is very poor.
Other options include Singapore government bonds which an indiviual can can apply online through ATM ($1000) for primary issuance and will be held in CDP. However, the rates for these are very low now.
Smaller Bond Notes Now Available (Today)