Looks like the inevitable has happened. Yesterday $Mapletree Log Tr(M44U.SI) issued a S$ perp, with an initial guide of 4%. Demand was strong and they tightened pricing to a 3.65% yield. It has a call option after 5 years and coupon reset every 5 years. All mostly normal - Except that there is NO coupon step-up after year 5 nor year 10.
It means buyers are really buying a perpetual with lower risk of redemption especially if rates rise over the years.
The only real possibility of a call is if the credit rating of the issuer improves a lot and they can call this and re-issue at a tighter spread.
My own view - I gave it a miss and rather buy some of the older secondary issues, even at a premium, as they have a better structure for the investor, not just for the issuer only.
Reply to @mj0101 : thank you for sharing, I never thought of comparing with similar trade/company to do my own rating. something new I learned. 谢谢 ! :)
I'm glad to keep an eye on your posts bro.
Great stuff!
Reply to @richardlokevo : perpetual.
Looks like the inevitable has happened. Yesterday $Mapletree Log Tr(M44U.SI) issued a S$ perp, with an initial guide of 4%. Demand was strong and they tightened pricing to a 3.65% yield. It has a call option after 5 years and coupon reset every 5 years. All mostly normal - Except that there is NO coupon step-up after year 5 nor year 10.
It means buyers are really buying a perpetual with lower risk of redemption especially if rates rise over the years.
The only real possibility of a call is if the credit rating of the issuer improves a lot and they can call this and re-issue at a tighter spread.
My own view - I gave it a miss and rather buy some of the older secondary issues, even at a premium, as they have a better structure for the investor, not just for the issuer only.
Reply to @mj0101 : thank you for sharing, I never thought of comparing with similar trade/company to do my own rating. something new I learned. 谢谢 ! :)
@BBChing @choonlim @LauShiErn
Reply to @mj0101 : thanks bro for tagging, and info, not ready to look into bonds yet... still studying stocks lol