Bond updates

Fragrance

Fragrance announced that they are buying back $30M of their 4.75% Nov 2021 straight bonds at 97.0. This can be interpreted as giving confidence to Fragrance bond investors. Fragrance probably do not see any meaningful use of funds over the next 3 years. They probably want to consolidate instead of growing.

But why did they not buy back the 6.125% Apr 2021 bonds instead? There are 2 good reasons:

  1. Buying back 4.75% Nov 2021 at 97.o will save 3% instead of buying back 6.125% Apr 2021 at 100.0
  2. If Fragrance buys back $30M of 4.75% Nov 2021, they will save paying $3.51M of coupons. If Fragrance buys back $30M of 6.125% Apr 2021, they will save paying $3.35M of coupons. Hence it is better for them to buy back the 4.75% Nov 2021 bonds.

Astrea V

Astrea V 3.85%B290620# A1 bond (5A1B.SI) is trading above par at 103.8 now, as expected.

Today is the 1st day of trading. Astrea V A2 is at 100.50 while Astrea V B is at 100.65.

Retail bonds opportunities

There are no obvious discount for retail bonds at the moment. The last time was in early Apr (http://wealthlions.com/2019/04/retail-bond-opportunities-apr-2019/) when one of the Oxley bonds was trading at close to 10% return. Although Aspial is giving 9% returns, its probably the worst business in this list.


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