Dear readers, the result of the Singapore first ever Green SGS bond (Aug-72) has been released.
For the aforementioned Green SGS bond, there was offering of the bond to both institutional and retail investors.
For the offer to retail investors, $50 million of the Aug-72 bond was allotted to retail investors and since the application by the retail investors amounted to $52.9 million, the public offer was about 1.06 times subscribed.
Let us compare the aforementioned subscription to that for the Aug 22 Singapore Savings Bonds. the retail investors’ demand for the Aug 22 Singapore Savings Bonds total to $2.4 billion in application for which only $700 million was allotted. And this translates to a subscription of about 3.43 for the Aug 22 Singapore Savings Bonds.
As such, based on the comparison of subscription rates, we can infer that the Aug 22 Singapore Savings Bonds is more than 3 times (to be exactly, 3.23) more popular than the Singapore Green SGS Aug-72 Green Bond among the retail investors with both products paying an average 3% annual interest over 10-years (please note the Aug 22 Singapore Savings bonds has a stepped up interest from 2% in first year to 3.29% in the 10th year).
I am not surprised that the Aug 22 Singapore Savings Bond is more popular than the Aug-72 Green Bond, really because the Aug-72 Green Bond has such a long holding period of 50-years compared to 10-years for the Aug 22 Singapore Savings Bonds. And further more, the bond price of the Aug-72 Green bond can fluctuate with variation of interest rates as compared to capital preservation for Singapore Savings Bonds.
But this does not stop some retail investors from applying $500,000 or more of the Aug-72 Green bond, however each of them was allotted $229,000 of the Singapore Aug-72 Green bond and that means a $6,870 annual interest (based on 3% interest per annum rate) or $572.50 per month for 50 years or $343,500 ($114,500 profit) after 50 years.
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