Asked by Anonymous

What do you think of the T2023-S$ Temasek Bond Offer?

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  • Ng Wei En
    Ng Wei En, Bachelor of Science(Information Systems) at Singapore Management University
    Level 3. Wonderkid
    Answered on 19 Oct 2018

    Seedly has an article about the Temasek Bond Offer. https://blog.seedly.sg/temasek-holdings-corporate-bond-issue-subsidary-temasek-financial-iv-private-limited/

    You may wish to note a bond of such quality and interest yield is usually open only to instituional investors only and usually in large denominations. This bond issue is denominated in $1000 and is easily within reach of most retail investors. You can almost think of the 2.7% interest as guaranteed given Temasek's credit rating. Also take note that you can also arbitrage your CPF OA's interest rate of 2.5% and earn an extra 0.2% if you pretty sure you won't need that sum in your OA in the next 5 years. Having said that, the bond can still be sold on SGX but its price is subjected to changes depending on interest rates.

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    • Question Poster
      Thank you for the information! I'm actually thinking of buying with cash on hand and not CPF. What do you think of that?
      23 Oct 2018
    • Ng Wei En
      Doesn’t hurt to put a sum which you’re comfortable with that is not gonna be needed in the next 5 years. If you have an existing investment portfolio, this would be a low-risk option to diversify your portfolio and provide some form of hedging towards the downside.
      23 Oct 2018