I invested in the SIA Bond 2019. With the current situation, what will happen to the coupon payments and my principal amount? - Seedly
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Asked 2w ago

I invested in the SIA Bond 2019. With the current situation, what will happen to the coupon payments and my principal amount?

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Hi anon,

At this point, your coupons should continue to be paid out.

However, the outcome of your principal amount, which will be returned in 2024 upon bond maturity, is less certain. I honestly cannot say what will happen since SIA's interest cover numbers aren't very encouraging, (along with other similar financial numbers) and a lot depends on how COVID plays out. The recovery of the Aviation industry will be a large factor in them honouring the capital. You could of course say that it's Temasek backed and won't be allowed to fail, but really, it's anyone's guess at this point.

This is why bonds also carry a fair bit of risk. It's more of a 'all or nothing' risk. The regular coupons generally have no issues being honoured. But either you get your capital back or you lose everything (just look at Hyflux)

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