Singapore Exchange (SGX) today launched its first initiatives to enhance the listing, trading and distribution of fixed income products to build a more vibrant bond market in Asia.

These initiatives include drawing more Singapore-listed companies and other organisations to issue bonds for listing and trading on SGX.

The listing and trading of fixed income securities such as preference shares and convertible bonds will also be encouraged. SGX also plans to halve the time taken to approve bond listings by streamlining the processes involved.

By the first quarter of next year, SGX expects to offer an on-exchange secondary market for individual and institutional investors to trade Singapore Government Securities (SGS). SGX’s Central Depository has been a custodian of individual investors’ SGS holdings since 1 April 2010.

Came across an article about how some investors are making money by teaming up with a terminally ill person to buy corporate bonds.

How it works is that some major U.S. companies often issue bonds with what is known as a survivor’s option. This option allows the joint-owner of the bond to redeem it at face value should the other owner die.

As some of these corporate bonds were trading at a huge discount during the recent financial crisis, people have been scooping up some of these bonds to make a quick buck.

Read more here:

Investors Tap into Deathbed Bond Deal

Temasek Holdings yesterday announced that it has priced S$500 million 3.785% Guaranteed Notes due 2025 and S$500 million 4.0475% Guaranteed Notes due 2035 to be issued by its wholly owned subsidiary, Temasek Financial (I) Limited, under the Issuer’s US$10.0 billion Guaranteed Global Medium Term Note Program.

The 15-Year Notes and the 25-Year Notes will be fully and unconditionally guaranteed by Temasek.

The 15-Year Notes were priced at a spread of 50 bps over 15-year S$ Swap Offer Rates. The issue price was at par, with a yield of 3.785%. The 25-Year Notes were priced at a spread of 65 bps over interpolated 20-year and 30-year S$ Swap Offer Rates. The issue price was at par, with a yield of 4.0475%.

Temasek is rated AAA by Standard & Poor’s and Aaa by Moody’s Investors Service, and the 15-Year Notes and the 25-Year Notes are rated AAA by Standard & Poor’s and Aaa by Moody’s Investors Service.

The Issuer intends to provide the net proceeds from the offering of the 15-Year Notes and the 25-Year Notes to Temasek and its investment holding companies to fund their ordinary course of business.

The offering is scheduled to close on 5 March 2010.

The 15-Year Notes and the 25-Year Notes are expected to be listed on the Singapore Exchange Securities Trading Limited on 8 March 2010.

Temasek Holdings has sold another US$1 billion in bonds, its fifth offering in as many months. Since October last year, Temasek has raised more than $4 billion through bond sales, including yesterday’s issue.

The latest 10-year offering will have a coupon rate of 3.265 per cent, which is lower than the roughly 4.3% yield in a similar offering last October. The bond is denominated in size of US$250,000.

Temasek has also doubled its global medium-term note programme so it now has the scope to issue US$10 billion (S$14.2 billion) in bonds, up from the previous limit of US$5 billion.

The reason given for the bond offering is to fund the ‘ordinary course of business’ of Temasek and its investment holding companies.

My wishlist: Temasek to issue S$ bonds to CPF board (instead of private investors) with the higher yield passing through to CPF members.

This week, the London Stock Exchange (LSE) launched a new bond trading platform that will make bond investing more accessible and affordable for retail investors.

For the launch of the bond trading platform, 49 gilts and ten corporate bonds by blue chip companies including Royal Bank of Scotland, Tesco, GlaxoSmithKline, BT, National Grid, Morgan Stanley and GE Capital have been made available for trading.

The trading platform allows investors to see prices directly and trade in increments as low as £1,000 for corporate bonds and £1 for gilts. Evolution Securities and Shore Capital Stockbrokers will help act as market makers on the platform.

In Singapore, access to the corporate bond market is usually available only to institutional investors or individual investors who are able to commit at least $200,000 on a single bond purchase.

There are a few statutory boards bonds (in size of $10k) which are listed on the SGX but liquidity for them is usually quite poor.

With fixed deposit interest rates at historical lows, there exists a gap in our market for low risk products which can give a decent yield of 4-5%.

Having a similar bond platform in Singapore would certainly benefit the retail investors here.