Should you buy the Temasek Bond (T2023-S$)

This is Temasek's first offering to retail investors. They seem to be trying to lead the way for more corporates to issue bonds to retail investors.

Let's dive in to see if you should buy it.

Compared to the recent Astrea IV bond

In June18, Astrea Capital IV Pte. Ltd which is wholly-owned by Azalea Asset Management Pte. Ltd. (“Azalea”) and is part of Temasek launched a 10y bond with 4.35%pa yield. 

The ownership and bond nature was harder to understand but ultimately the bond in my opinion was kind-of government backed.

As of today, that bond price has gone up by 5% (congrats to those who bought) and the corresponding bond yield is now only 3.56%pa for 10years.

I do think that this Temasek Bond (T2023-S$) seems a great deal at 2.7%pa for 5years only.

Compared to Singapore Savings bond (SSB)

If you buy the november18 issue, you will be getting 2.22%pa if you hold for 5years.

But for an extra 0.48%pa, the Temasek Bond (T2023-S$) seems a great deal considering it is also risk free. Of course, the SSB has much more flexibility and no trading cost in redemption

Do you know that you can use CPFOA to buy?

CPFOA interest is 2.5%pa

So if you have some excess CPFOA lying around, I think its a good idea.

Question: What if I suddenly need CPFOA to upgrade my house?

The bonds can still be sold in the open market and funds will be returned back to your CPFOA (with some time lag of course)

If I'm not wrong, the amount you can buy should be under the "stocks limit" (in red)

Do check first before you buy.

Take note of this too when applying.

You cannot make one cash ballot and one CPFOA ballot. It has to be done together in one application for at least $2,000.

FROM Temasek's website: One application using cash only AND another application using CPF Savings only is not permitted, regardless of subscription amount.

If it's too complicated, just buy with your cash savings.

How to buy?

If you can do a $250k amount, let me know.

I can find placement for you (subject to availability).

If not, pay $2 and ballot by ATM or IBANKING (especially for CPFOA). Minimum investment of $1,000.

The application timeline is stated below.

Image source: https://www.temasek.com.sg and http://www.sgs.gov.sg

PS: The previous Astrea IV Bond was oversubscribed by 7.4x

but all applicants who applied for $4,000 or less received their full allocations.

Click here to read our post on Astrea IV Retail PE Bond For Retirement?

Other suggested post to read on this Temasek bond

1) https://www.fool.sg/2018/10/18/3-important-investing-considerations-you-should-note-for-the-latest-temasek-t2023-s-retail-bond-offer/


New updates on 25oct18!

Those who applied for up to S$6,000 of bonds stand to receive their full application.

For amounts above S$6,000, allocation will be between S$6,000 and S$9,000.

I've gotten mine, have you?

Leave your comments at the bottom

Last updated on December 18th, 2018 at 09:13 am

Josh Tan Jian Liang (CHFC) Principal Author

REVIEWS: https://theastuteparent.com/josh-tan Practising financial planner with Promiseland Independent Pte Ltd. EXPERIENCE: More than 13years. Josh Tan is a young parent, speaker, author and founder of TheAstuteParent.