Comparing Debt to Earnings

I always compare my leveraged returns against the best practices in the market, such as professional REIT managers borrow banks to make money for their Real Estate Investment Trusts (REIT). This allows me to evaluate the risks that I am taking vs the potential returns.

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OTC Bond Opportunities (July)

Since Feb 2018, bonds and reits have fallen and have not recovered to Feb highs. With interest rates rising, they have fallen out of investor’s favour. Yet recently, many SREITS are now making 20 day highs, outperforming most SGX stocks. Like wise bonds have recovered slightly after long tenor bonds were beaten down.

I sold ASTREA IV S$242M4.35%B280614 (RMRB.SI) retail bond at 1.05 last friday. Nothing wrong with this bond, in fact, I like this bond (seeĀ 5% is more than one year’s coupon. The money can be channeled elsewhere.

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Astrea IV 4.35% Retail Bonds

Why I like Astrea IV Class A-1 Retail 4.35% retail bond:

  1. Indirectly wholly-owned by Temasek Holdings. Bondholders are ranked higher than equity holders.
  2. Secured bond. Most secured bonds have typically much lower coupons.
  3. Risks are diversified across 596 companies.
  4. Beneficial structured safeguards for bondholders

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