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Singapore IPOs: Why I No Longer Cover Every Listing

Some readers may have noticed that I have not been writing about every Singapore IPO since last year. The simple reason is that life has become busier. Between my day job, an increasingly packed travel schedule, family commitments and desire to play more golf, I have become much more selective about how I spend my time.  Writing detailed IPO reviews takes time — reading prospectuses, analysing financials, comparing valuations and understanding the competitive landscape. While I still enjoy investing and writing, I no longer feel the need to cover every IPO that comes to market. Instead, going forward, I will probably focus only on IPOs where I am seriously considering investing my own money or where there is something particularly interesting that is worth discussing. I suspect this will make the blog more useful as well. Rather than writing about every deal, I can spend more time sharing my thoughts on the handful that I believe deserve attention. That bring...
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Astrea V - Balloting Results


Astrea V announced its balloting results today. Unlike equity, the bonds will only start trading on this Friday, 21 June 2019.


As stated in their press release, all applications below $50k received some allocation and 75% of the $180m shares went to them, "reflecting the Issuer's desire to allocate to smaller retail investors".

I am pleasantly surprised at the 50% chance of being allocated a meaningful amount. To apply $50,000 and have a 50% chance of receiving $16,000 worth of bonds is definitely not a bad outcome. Those who applied for $1m shares now receives $50,000 rather than $11,000. That should at least make them "happier" for now. 😆 

As for me, I am really the "salty olive" ☹️ .... couldn't even get any at 50% chance 🤪


Congrats to those who got it! ... Make Astrea part of your bond ladder portfolio. 

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Anonymous said…
Assuming if tomorrow Astrea V trades at $1.06 on the SGX open market and if I buy 10 lots at $1.06, and assuming the online brokerage costs for this 10 lots purchase is $30,
is it the actual yield that I'm getting is 2.4365% if I buy 10 lots at $1.06 from the open market?

Becoz yearly dividend of $385 times 5 years is $1925 and if I buy 10 lots at $1.06 and redeem after 5 years means lost $600+$30 brokerage costs, so actual yield is (1925-600-30)/5/10630 =2.4365%

Hence is it the actual yield that I will get if I buy 10 lots Astrea V at $1.06 is 2.4365% ??
19 June 2019 at 23:55
Anonymous said…
I subscribed for 49k via OCBC and wasn't alloted any shares. $49k was deducted from my bank account on 16 June with a $2 processing fee, and then $49k was refunded to me fully on 19 June, I'm checking with OCBC and Astrea V team if there was an error in processing, anybody encountered the same?
20 June 2019 at 08:27
Mr. IPO said…
Yes. 2.4% sounds probably right. There is a good chance the bonus 0.5% will be paid at redemption as well
20 June 2019 at 08:40
Mr. IPO said…
Did you apply twice or key wrong CDP account ? If you apply $49k and get nothing means your application is invalid.
20 June 2019 at 09:36
Anonymous said…
Isn't the interest payout fixed at 3.85% for the first 5 years and only if they don't redeem at the end of 5 years then there is a additional step-up interest of 1% after the 5th year onwards?

Hence what is this "good chance the bonus 0.5% will be paid at redemption after 5 years" which you wrote?
20 June 2019 at 11:22
Mr. IPO said…
The 0.5% of your principal amount is a one time payment made at redemption if Sponsor hits the Performance Threshold, ie receives 50% of its initial equity during the first 5 years. This has nothing to do with the 1% step up in interest rate. Hope that helps. Astrea III Class A-1 is a 3 year note and it met the threshold - so a 0.3% bonus will be paid in July this year.
20 June 2019 at 11:32
Anonymous said…
By the way, if I buy 10 lots of the Temasek 2.7% Bond from the open market at $1.022 today and becos this 2.7% bond already paid out 1 dividend 2 months ago, is it the actual dividend yield that I will get is 2.098%?

Becos $270 yearly dividend times 4.5 years is $1215 and if I buy 10 lots at $1.022 today and redeem after 4.5 years means I lost $220 and $30 brokerage costs hence the actual yield that I get if I buy 10 lots of the 2.7% Temasek Bond at $1.022 today is ($1215-$220-$30)/4.5/10220 = 2.098% ?

So is it if I buy 10 lots of the Temasek 2.7% Bond from the open market at $1.022 today, then the actual yield that I am getting is 2.098%?
20 June 2019 at 16:33
Mr. IPO said…
You would need to compute the yield to maturity from the point you buy. I think your computation is a ball park estimate which is fine. The most important thing is to remember that you are being redeemed at par at maturity. Sorry for the late reply.
21 June 2019 at 17:11
Anonymous said…
Hi Mr IPO! Are you covering the Prime US REIT IPO?
12 July 2019 at 20:42
Mr. IPO said…
Yes. This weekend. :) sorry for the late posting
12 July 2019 at 22:30
Mr Low said…
Where do you get these ipo subscription rate details from? Sgx website?
17 July 2019 at 00:04
Mr. IPO said…
Yes. Www.sgx.com
17 July 2019 at 08:05
Anonymous said…
Anyone still here?

I am thinking of buying $50,000 of this Astrea V bond at $1.038 from the open market.

What are the chances/probability that this AstreaV bond will default and unable to redeem the bond after 10 years??

Because I read the comments in the AstreaV bond's thread in the HardWareZone's money section and many forummners there said that this Astrea V bond is not very safe...

(I already invested $120,000 into the Singapore Savings Bond hence I don't want to put any more money into SSB and hence I am thinking of buying this AstreaV bond but I am now undecided after reading the comments from HWZ on this AstreaV bond)
29 July 2019 at 16:27
Mr. IPO said…
First of all, the legal maturity is 10 years but the scheduled maturity is 5 years. So you should treat this as a 5 year bond as there is a very very high chance that it will be redeemed at end of year 5 with a 0.5% extra bonus.

Do your homework and stop reading HNZ other for entertainment :) - you must be comfortable with the credit risk. S&P issued a A+ rating and Fitch gave it A rating. To set the context, many of the local corporate bonds are not even rated, so to get an investment grade do actually mean something.

Do note that if you pay $1.038, you will only get back $1 at end of 5 year plus the 3.85% coupons in between.
9 August 2019 at 17:52
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