CMA bond

CapitamallAsia (CMA) released a 3.8% bond lately.

Details of the bond are as follows:

Yield

This is a 10 year bond. For the first 5 years, the yield is 3.8%. If not redeemed by CMA, the yield will be 4.5% from the 6th to 10th year. During the last 5 years, CMA can choose to redeem the bond.

“Optional Redemption Dates” are 12 January 2017, 12 January 2018, 12 January 2019, 12 January 2020 and 12 January 2021,

min. amount

Minimum amount to apply is 2k SGD. Subsequent increments of 1k

Cash only, no CPF

Payout

Payouts are given semi-annually during Jan and July

Time table:

Lodgment of the Offer Information Statement : 3 January 2012

Opening date and time for applications for the Bonds under the Placement

: 3 January 2012 at 2.00 p.m.

Opening date and time for applications for the Bonds under the Public Offer:

4 January 2012 at 9.00 a.m.

Last date and time for applications for the Bonds under the Placement:

9 January 2012 at 2.00 p.m.

Last date and time for applications for the Bonds under the Public Offer:

9 January 2012 at 2.00 p.m.

Balloting of applications for the Bonds under the Public Offer, if necessary (in the event of an oversubscription of the Bonds under the Public Offer). Commence returning or refunding

application moneys to unsuccessful or partially successful applicants:

11 January 2012

Expected Issue Date of the Bonds : 12 January 2012

Expected date of commencement of trading of the Bonds on the Main Board of the SGX-ST:

13 January 2012

My thoughts about this bond:

Attractive yield for bond

For a bond, 3.8% is quite attractive. Some other bonds for comparison are as follows:

• SIA 5-year giving 2.15% p.a.
• CapitaMalls Asia 1-year and 3-year bonds giving 1% and 2.15% p.a. respectively
• CapitaMalls Trust 2-year giving 2% p.a.
• F&N 5-year and 7-year giving 2.48% and 3.15% p.a. respectively

Note that a bond with a longer expiry date typically gives a higher yield.

Other listed bonds on SGX"

http://www.sgx.com/wps/portal/sgxweb/home/marketinfo/securities/fixed_income/bonds

The numbers behind the counter is the bond expiry. Upon the expiry, the face amount will be returned to the investor.

Relatively safer investment

Bonds are a relatively safer investment compared to reits or preference shares. Unless CMA defaults, investors will expect to get back their capital. One can include some bonds to their portfolio as part of their diversification strategies.

No CPF

It is a pity that we cannot use CPF to apply for this bond. The 3.8% yield beats CPF interest rates of 2.5% hands down.