Comparison of Olam perpetual bonds

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Olam 5.5% SGD perps

  • Price is 100.85/101.75. Price is moving up almost daily, because this is a recent new issue.
  • YTC is 5.09%
  • Supercharged yield based on S$80k funding is 11.37%
  • Reset in Jul 2022 is 5Y SOR + 5.685%

 

Olam 5.35% USD perps

  • Price is 99.0 / 99.85. Price has been sideways for many months, which is normal.
  • YTC is 5.39%
  • Supercharged yield based on US$65k funding is 11.39%
  • Reset in Jul 2021 is 5Y UST + 6.29%
  • Custodian fee may be charged at most brokers
  • USD Forex risk

 

Which is better? It is not clear, they each have their pros and cons. Note that both give very decent yield compared to most bonds. And more importantly, they have the backing of Temasek.

  • The SGD perp may continue to appreciate in price, has lower SGD financing rate from most brokers.
  • The USD perp’s price is lower, has better reset rate, has earlier call date
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