BOND THREAD

[cbsh38584]

[QUOTE=cbsh38584;496284]Just last mth, I bought Shui on USD perp bond 10.25% @97.8 when there is a mini correction. It went down from 103 to 97+. So I took the chances to buy it.
Now it is 100.5. This is to replace my citi pacific USD perp bond 8.25% which I sold in Sept'14 @115 (bought @94.7). My profit for citi pacific is almost S$100k for holding 20 mths.


I bought Shui ON USD perp 10.25% bond @97.8 in Oct14 . Sold today (31 Mar15) @100.50.
Almost 7%+ profit or US$15k for holding est 5 mths.




rdgs,
Vic

[cbsh38584]

CS has 70% LTV . SC has zero LTV. Such a big LTV gap . This is a short dated bond. Not familiar with this Indonesia Telco company. FYI only.


TRIKOMSEL
A leading retailer & distributor of mobile phone handsets & mobile services products in Indonesia, with an estimated market share of 30%.

The company is around 78.6% owned by its CEO & President Director Sugiono Wiyono Sugialam and 13.5% by Std Chartered Private Equity.

It is listed on the Jakarta Stock Exchange and has a market
capitalization of close to USD 750 m.

5.25% Trikomsel 2016
ISIN SG55I2992272
Rating N/A
LTV 70%
Indic offer 98.00 (Low @96 to buy on 28th June13)
Indic YTM 6.00

rdgs,
Vic

SoftBank acquires 19.9% stake in Trikomsel.
I bought Trikomsel ave @0.973 total amt S$500k (due 2016) in Jul13 & Jul14. Price to buy now is above 100.

Yesterday Q at 0.98 for the Trikomsel 7.875% due in 2017. But no seller at all.

[Forest ang]

may i ask if i were to buy bonds at their IPO, and hold it till maturity, will the principle be returned back 100%?

[minority]

No one look at reits?

[starrynight]

Assuming no default, the answer is a qualified yes. "Qualified" because it is not that common for corporate bonds in Singapore, but the company could issue at a different price from the redemption, e.g. issue at 96 and redeem at 100. If I recall correctly, this happens more with government securities.

may i ask if i were to buy bonds at their IPO, and hold it till maturity, will the principle be returned back 100%?

[starrynight]

I have some Cache and Cambridge from some time back. Decently in the money. But if you believe the interest rates will go up soon, that would cast a shadow on many of the reits.

No one look at reits?

[amk]

hmm no one mentioned the big news yesterday ?

baoding, 1st ever onshore SOE (State Owned Enterprise) HY bond default. this sets a precedence that SOE can default. considered good news for china: 1st step towards bond market behaving normally.

Kaisa: off shore dollar HY bond default. remember all those chinese developer selling high yield dollar bonds offshore ? seen some in this thread too. "repent" time these are the bonds we can buy easily, but the risk was underpriced.

be careful on HYs.

[cbsh38584]

hmm no one mentioned the big news yesterday ?

baoding, 1st ever onshore SOE (State Owned Enterprise) HY bond default. this sets a precedence that SOE can default. considered good news for china: 1st step towards bond market behaving normally.

Kaisa: off shore dollar HY bond default. remember all those chinese developer selling high yield dollar bonds offshore ? seen some in this thread too. "repent" time these are the bonds we can buy easily, but the risk was underpriced.

be careful on HYs.

China is drafting plans for bond purchases to boost liquidity and shore up the country's $2.6 trillion edifice of local government debt, becoming last of the world's big economic powers to resort to quantitative easing (QE). The news propelled the Chinese stock market to a seven-year high.

Even the most of the Russian straight bond price has gone up except the Perp bond. Investing is getting very complex. Really don't know when will the big crisis going to happen.

[Arcachon]

1997 IMF say no printing of money.

2008 Fed say let start printing money.

Now everyone printing money.

Still have lot of money in the Bank, better start buying assets before the money in the Bank have a haircut.

[cbsh38584]

China's central bank cuts 1-year benchmark interest rates by 0.25% point. Good for short dated
China corporate bond.

Three years ago, it was played by Western media that China property market will collapse soon. It has been
saying the "the wolf" (crisis) is coming many times. But the "wolf" (crisis) is still nowhere to be found. So Not
easy to know when the "wolf" (crisis) will come. It will eventually come but not a "lone wolf"(small crisis) .
It will be a pack of very big "wolf" (a very big crisis). Maybe in 2017-2019. We shall see.

In the meantime, still investing in corporate bond with leveraging but slowly switch to Euro & Swiss denominate
currency as the borrowing cost is <0.9% Vs US 1.07%(will increase soon) vs SGD 1.7% (likely to increase more)

[cbsh38584]

Bought Russian Bank , Sberbank Euro bond 3.35% @Euro$91 (below par) to replace another Russian bank , VTB bank
SGD bond 4% ,amount S$500k Due in July15. Borrowing cost is Euro 0.9%.

[cbsh38584]

Bought Russian Bank , Sberbank Euro bond 3.35% @Euro$91 (below par) to replace another Russian bank , VTB bank
SGD bond 4% ,amount S$500k Due in July15. Borrowing cost is Euro 0.9%.

Price of the Russian Sberbank 3.35% Euro $ bond is trading around 94.5. Capital gain of 3.8%.

============================================================
In early Dec 2012, Russian VTB bank sold AUD 500m due 2017 bonds with 7.50% coupon.

Aus/USD was trading around 1.04 in early Dec 2012. Today, Aus/USD trading 78. Almost 25% loss
in FX for those who borrowed USD & converted to Aus @1.04 in early Dec 2012.

Today, just bought Russian VTB bank (Aust $) @99.70 amt Aus$200k. Borrow [email protected]% &
convert it to Aust @0.78. LTV 65%.

FYI, 52 wks low was 81 & 52 wks high was 1.08 this VTB bank.

[stl67]

Hi Vic,

thanks for keeping us posted. Next time I got bullet, I will join u.

George

[cbsh38584]

If all of u know & really understand this . To get rich in investing is as easy as ABC.


1.An intelligent investor need not have a PHD but has the patience to wait out the cycles and uncertainties.

2.The greatest enemy is your emotional ,not the market

3.What is whispered in your ear is often heard a hundred miles off.
Hearsay is dangerous. Don't follow the HERD mentality.

4. Contra trading is sinful especially penny stocks. It is a waste of time & you will never win in long run.

5.Never borrow to invest if U are unable to manage your emotional well.
Your inability to cut loss if U make a wrong decision or market condition has turned bad will cost in big HOLE.

6.君子报仇，十年未晚. If U understand this Chinese proverb. U will be a successful investor.

When a investor want to be rich in investing stock, ten years is not too late; one should bide one’s time and wait for the right opportunity to seek buy when there is blood in the street.

7.玩火自焚 – Play with fire and you get burnt.
Speculating penny stocks is a NO NO. You will lose your hard earn money as well as losing loving family in long run.

Lastly, be a EDUCATED man. Keep learning & upgrading your knowledge.
Lee Kuan Yew definition of an educated man is a man who never stops learning and wants to learn. I am not interested in whether a man has a Ph.D or not, or an M.A. for that matter, or a diploma.

[starrynight]

Possible default in China tomorrow... if it happens, will be the 3rd one this year: http://www.zerohedge.com/news/2015-0...r-miss-payment

[Kelonguni]

Steady advice!

If all of u know & really understand this . To get rich in investing is as easy as ABC.


1.An intelligent investor need not have a PHD but has the patience to wait out the cycles and uncertainties.

2.The greatest enemy is your emotional ,not the market

3.What is whispered in your ear is often heard a hundred miles off.
Hearsay is dangerous. Don't follow the HERD mentality.

4. Contra trading is sinful especially penny stocks. It is a waste of time & you will never win in long run.

5.Never borrow to invest if U are unable to manage your emotional well.
Your inability to cut loss if U make a wrong decision or market condition has turned bad will cost in big HOLE.

6.君子报仇，十年未晚. If U understand this Chinese proverb. U will be a successful investor.

When a investor want to be rich in investing stock, ten years is not too late; one should bide one’s time and wait for the right opportunity to seek buy when there is blood in the street.

7.玩火自焚 – Play with fire and you get burnt.
Speculating penny stocks is a NO NO. You will lose your hard earn money as well as losing loving family in long run.

Lastly, be a EDUCATED man. Keep learning & upgrading your knowledge.
Lee Kuan Yew definition of an educated man is a man who never stops learning and wants to learn. I am not interested in whether a man has a Ph.D or not, or an M.A. for that matter, or a diploma.

[starrynight]

http://www.bloomberg.com/news/articl...uster-ib3fx43c

China Shanshui Cement: possible chain of events which may lead to a put option to redeem bonds, which may then lead to a default

[cbsh38584]

One of the method for me to buy junk bond is to look into UOB HY bond fund top 5 holdings.
Then check with 2-3 different bankers to discuss with them on their analysis.


In 2013, I bought Citic pacific Perp USD bond 8.875% @94.7 because it is one of the top five
UOB united Asian HY bond holding & it was recommended. Sold @115.7 in 2014.

Today, I view the latest UOB united Asian HY bond top 5 holding as of 31st Mar15.
CIFI Hlds Grp Co 8.8% 27/1/19 (to buy@103) and Wanda Properties Intl Co 7.2% 29/1/24 (to buy >@103).
Both is on HOLD list due to their premium pricing.

I will wait for the price correction for these CIFI hlds grp & wanda to go <100.

[stl67]

Good idea..

[cbsh38584]

Bought Russian Bank , Sberbank Euro bond 3.35% @Euro$91 (below par) to replace another Russian bank , VTB bank
SGD bond 4% ,amount S$500k Due in July15. Borrowing cost is Euro 0.9%.

Sold my VTB (LTV 60%) Russian bank (in Swiss Franc) 5% bond CHF$100k due in Nov15 which Bought @99.5 in Sept14.
Sold at 100.4. Profit est CHF4300.


Bought additional one more lot of Russian bank, Sberbank 3.35% (in Euro) @91.4. Total EURO$200k for Sberbank Euro bond.
Once it hit my tgt, I will just take profit.


The last few mths, most of the Chinese developer USD bond has gone up between 2%-4% due to China government QE.
Shui on perp 10.5% sold in Mar15. Today price was 103.

[cbsh38584]

The Shanghai A share index continues to drop another 6% due to one third of small cap stock being suspended .

The senior staff of the small cap companies used their companies share as collateral to borrow more money to buy RED chip. The hedge fund (shark) see the opportunities to short sell due to very high leverage. HK stock mkt is also affected & drops by 4.5%. I believe SG mkt maybe affected & hopefully just a small correction.

DONT buy on optimism. Buy on pessimism. Investing is getting more complex as there are so much manipulation. The internet tool like facebook/Twitter etc & TV media like CNN , Bloomberg , CNBC etc make it more easy to manipulate people MIND.

So be careful when U invest. Don't let your hard earn money go down to the drain. Making a living is very tough now.Have friends (40+-50+)so scare of taking sick leave even though he is sick (not very sick). Some intentionally stay late because their colleague also stay late. Afraid of being retrenched for those less hardworking.


HY corporate also not spare but it only drop between 1-3%. Not sure whether it will continue. I am waiting for the HY USD bond to correct more & hope to buy a short dated bond due 2016-2018. The most safest AAA bond is your CPF. Make a afford to find out more to put cash into CPF (prefer age 40+) & plan according to your need.


In May 15, My Banker did recommend a DAC (daily accured coupon) note on China life HK (Spot price $39) + AIA hk ($51). Strike 82% ($31.9/$41.82). K.O 100%. Coupon is 12% & 1 yr period. I rejected it as the strike price is too deep & coupon is high 12%. I believe it will drop. Today, China life drops to $28.50. If China life fall below $31.9, they will rec ZERO coupon until it is >$31.9. Same goes to AIA HK but AIA is a super blue chip. Only drop 1-3% ($48+).

On 7th Jul15, I ask my banker to re-fresh a new pricing for the same DAC note. To my surprise, the term still remain the same. strike 82% , K.O.100% & 12% coupon. I decide to execute the DAC note trade base on FEAR. China life Spot=30.60, AIA HK= $50 Strike 82% ($25/$41). If both share price remain >82% & <100%, I shall continue to rec daily coupon (base on 12% p.a) until K.O (100%) or mature 1 yr later.

[Forest ang]

Hi Hi, as a newbie interested in bond, may i seek your opinion in the Singapore market? I am looking at the latest issue of Centurion Coropration, 3 years @ 5.5%. Are such bonds any different from those that u mentioned? is the capital guaranteed if i hold till maturity?
Thank you

[Arcachon]

Bank Capital already not guaranteed in full, Don't think any Bond got.

[Forest ang]

i was told if i hod till maturity, and if the company does not fold..i will surely get back the face value...issit true?

[newbiebondinvestor]

hi,

I have been on reading this thread since about a year ago but was not able to register for some reasons and for a long time. Some quick info about me: I am into SGD bonds and have a couple of bonds. I dont think I can call myself a HNWI any time soon.. currently at the privileged/citigold kind of level. Borrowing costs are increasing and I am paying about 2% p.a. I have some spare funds available and am looking for good deals in the local bond market. New offers are not very enticing.

I realised that bond financing is not readily available to those <1m AUM. So far, I only know of Citi and SCB. Even then, the bonds available for leverage are very limited and they also need to be rated. If you all know any other banks that are offering bond financing for <1m AUM, please let me know. Thanks!

[Amber Woods]

hi,

I have been on reading this thread since about a year ago but was not able to register for some reasons and for a long time. Some quick info about me: I am into SGD bonds and have a couple of bonds. I dont think I can call myself a HNWI any time soon.. currently at the privileged/citigold kind of level. Borrowing costs are increasing and I am paying about 2% p.a. I have some spare funds available and am looking for good deals in the local bond market. New offers are not very enticing.

I realised that bond financing is not readily available to those <1m AUM. So far, I only know of Citi and SCB. Even then, the bonds available for leverage are very limited and they also need to be rated. If you all know any other banks that are offering bond financing for <1m AUM, please let me know. Thanks!

I invest in both local and foreign bonds through a bank-linked security firm with financing through a margin account. They offer financing up to 70% depending on the quality of the bonds. Through a margin account, if the bond price dives to below your limit, you will need to top up cash back to the limit. With quality bonds, you need not worry too much about prices diving unless crisis hits or the firm in deep trouble. However, to be prudent, you must always have enough cash at hands in case crisis hits, bond prices dive and you still have cash to top up without having to force sell at a lost.

[cbsh38584]

Bought Russian Bank , Sberbank Euro bond 3.35% @Euro$91 (below par) to replace another Russian bank , VTB bank
SGD bond 4% ,amount S$500k Due in July15. Borrowing cost is Euro 0.9%.

1) Bought S$250k Lippomall SGD bond 4.88% @102.2 in May14. LTV was 70%.
Matured @100 on 7th July15. Net Profit est $5k+

2) Bought S$500k SGD$ Russian VTB bank in July14 @98.5. LTV was 70%
Matured on 20th July15. Net Profit est $20K+


Bought Euro$200k Russian Sberbank Euro 3.35% bond @91.30 & it surge to 96.5 after Russian VTB bank embarked on a liability management exercise in which it is seeking to buy back about USD 2 bn worth of its outstanding Eurobonds denominated in USD, AUD and CHF.

Also Bought Aus$200k Russian VTB 7.5% bond @99.7. It also surge to 100. Hopefully, VTB will offer a better price to buy back it AUS$ denominated bond.


When Shanghai A share index tumbled from 5000 to 3500 within weeks from Jun15 to early Jul15. There is a only slight correction 1 to 3% in the high yield Chinese corporate bond for a very short period of time. I try to queue to buy Chinese developer CIFI 8.875% due 2019 @102 during the mini crisis. Unfortunately, there is no real panic selling. Price to buy now is 104+. I have reduced my SGD borrowing due to the raising borrowing cost around 1.6 to 1.9. That is why I switch more in Euro , CHF & USD denominated bond which is very much cheaper. But need to watch out for coming higher USD borrowing cost from Sept15 onward. I hope to cut down my bond leveraging more by 2016.

FYI, my friend told me DBS SGD borrowing cost est only 1.45% (private banking).

[Laguna]

Hi...I'm back...Hardly visit this forum nowadays, enjoying my retirement.

Just to share the latest restructuring of my investment. started doing these a few months back.

Converted big portion of investments in US$...
Converted all borrowings into Yen and Euro...reasons being bearish in these currencies and lower borrowing costs. yen is very cheap to borrowing. costly to borrow in US$ and S$.
Shifted out portion of bond position and moved into U.S., Europe and Asian equities.

I managed to have good pricing for the Forex, switching and borrowing.

For properties, very sian..
Higher maintenance fee, lower rental income, difficult to find tenants, higher interest cost...

[cbsh38584]

The AUD is a currency play with a commodity sector. The AUS dollar weakness is due to China & the world weak demand for commodity .
Australia is a huge country. It has so much of things to sell (Tourism , plenty of land , Beef , wine , wheat , hard commodity etc ).
So if Aus dollar dips below 1SGD, I guess it is probably the best time to hold some Aus dollar equity or buy AUS$ bond.

Waiting for RBA next decision on rate cut this coming Aug15 before deciding to add more Aus bond.

1 AUS=S$0.96 (Jan 2009)
1 AUS=S$1.26 (Feb 2010)
1 AUS=S$1.31 (Apr 2011)
1 AUS=S$1.08 (Mar 2015)
1 AUS=S$1.008 (Jul 2015)


1 AUS=US$0.65 (Mar 2009)
1 AUS=US$0.98 (Oct 2010)
1 AUS$=US$1.08 (Apr 2011)
1 AUS=US$0.78(Mar 2015)
1 AUS=US$0.738 (Jul2015

[Werther]

Hi...I'm back...Hardly visit this forum nowadays, enjoying my retirement.

Just to share the latest restructuring of my investment. started doing these a few months back.

Converted big portion of investments in US$...
Converted all borrowings into Yen and Euro...reasons being bearish in these currencies and lower borrowing costs. yen is very cheap to borrowing. costly to borrow in US$ and S$.
Shifted out portion of bond position and moved into U.S., Europe and Asian equities.

I managed to have good pricing for the Forex, switching and borrowing.

For properties, very sian..
Higher maintenance fee, lower rental income, difficult to find tenants, higher interest cost...

Welcome back Laguna.

I am also thinking along the line of getting some US$... but how to do it? You bought US$ bonds?