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Cl

14 Jan 2021

∙

General Investing

How do the bonds IPO works?

Hi all,

I've seen SIASP, the first USD Bonds listed in FSMOne. It cost about USD750 when subscribing to the initial 200,000 bond.

Does it means that I just pay USD 750 for 200,000 units?
Anyone who have subscribe to this IPO, can advice? Apologies, I'm new to bonds IPO.

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Wrong Sean

14 Jan 2021

Bonds are like IOUs. Meaning you lend money to the company. In return, the company pays you interest in the form of coupon payments. The pricing depends on the demand for the bond.

For the bond IPO example, you will lend US$200,000 min. to the company (SIA) and pay FSMOne for the transaction cost. Total amount required will be US$200,000 + transaction fee. Ongoing will be the platform fee every quarter.

There is a calculator at the bottom on what is the payment amount. You can try that to see what is the payment required. Do add 3% as FSM requires a buffer amount.

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