Today, there was a new issue of GSH senior bond. For those who is not aware, the major shareholder of GSH is “poppiah king” Sam Goi.
This is a bond that is very well designed. I would have bought it – if it can be supercharged (leveraged).
I really like the following clauses that is inbuilt into the bond:
- If Sam Goi and his immediate family members cease to own in aggregate at least 35% of the issued shares of GSH, this bond will be called back at par.
- If GSH shares is suspended > 10 consecutive working days, this bond can be redeemed at par.
These are great terms offered by a rich businessman for lending money to him. Gives added peace of mind.
Very unfortunately, it cannot be supercharged, so I will not be buying. If i have S$250,000, I would rather buy 3 lots of OUE 4.25% 2Y (supercharged) rather than 1 lot of GSH 5.x% 3Y.
- Higher net yield
- This OUE bond has call dates every 6 months that gives added protection price from falling
- Option to buy 1 lot ($80k) or 2 lots ($160k), rather than to commit $250k into 1 counter.
- Better credit quality
- Assets that I can touch and feel
- I'm a remisier with Maybank Kim Eng, and as a bonds and REITs investor myself, I guide my clients to build resilient bonds and REITs portfolios. If you like to be guided, please contact me regarding how to become my client; It's free!
- WealthLions is my blog where I journal my trading ideas and share my opinions about the markets. To receive an email whenever I post them, please subscribe to my Blog Updates. If you like to be kept posted of my events, please subscribe to my mailing list. No spam, I promise.