Choice of Astrea bond to purchase

I would like to purchase some Astrea bonds on SGX. Sadly, I missed the IPO in May this year for the Astrea 7 but I don't mind buying Astrea 7 slightly above par value (i.e. at slight premium). However, I also saw that Astrea IV, V and VI bonds are also trading on SGX. The Astrea 7 BBB+ bonds are unique with no comparable bonds offered in earlier rounds so if I want that 6% coupon rate, that's the only choice for me. However, for the 4.125% coupon bonds offered in Astrea 7, I can also find similar coupon rate bonds in IV and V. So am wondering how should I choose? Thanks!

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Tan Choong Hwee

05 Sep 2022

Investor/Trader at Home

Since you missed the IPO, you can only buy it from SGX, and as you have indicated, there are previous Astrea bonds that offer similar yield based on market prices. You can choose from any of these Astrea bonds based on the highest yield.

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Billy

05 Sep 2022

Development & Acquisitions Manager at Real Estate Private Equity

I would think it lies with your risk level. Indeed Astrea 7 BBB+ offers a coupon rate that's higher, but has a higher LTV ratio at 40% as compared to its counterpart 4.125% at 30% (hence the difference in coupon rates). The 6% bond is denominated in USD, thus this would introduce FX risks as well.

You can read detailed analysis of Astrea Class A-1 / B bonds on seedly or other financial blogs on their pros and cons! https://blog.seedly.sg/astrea-7-bonds-interest-...

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