From Straits times
Bonds back in favour with investors :Survey
===========================
More Singaporean investors are looking to invest in bond this year, a study has revealed. Equities remained popular. Property become the least popular asset class for the 1st time - Although about 60% still felt property was investable for long run.
China developers selling bonds to affluent S'pore investors
====================================
Private banks bought 79% of central China real estate (CCRE) which Capland is one of the substantial shareholder (>20%). The Henan-base developer paid 6.5% coupon SGD bond on the 3 years securities.
I bought the previous central china real estate SGD 10.75% bond in 2012 which is due in 2016. Price is around 107. The LTV is 60%.
1st batch of Central china real estate SGD bond issued in 2012.
Currency SGD
Min amount SGD$250k
Coupon 10.75%
Matured in Apr 2016.
Junk bond - non investment grade
LTV 60%
Your Cash required = S$100k (40%X 250k )
Your Borrowed amt = S$(60%X250k) = S$150k
Bond Coupon Yield = 10.75%
Coupon $$$ = 10.75% X S$250k = S$26,875 yearly
Your loan interest = (1.1% X S$150k)
= S$1650 (interest paid/year)
Safekeeping Fee = 0.2% or S$200 per year
Net cash = US$(26875 - 1650 - 200 ) = S$25025 /year
Return of investment % = (S$25025 /$100,000)
= 25% with leveraging with RISK.
http://tradehaven.net/ website is very educational. This guy is expert in bond.