Why Temasek bond got strong retail response

Temasek’s inaugural public retail bond offer last month was met with hot demand, adding some excitement to the local investment scene.

Many investors will now be hoping the robust response could prompt more issuers to explore bonds of a similar nature and quality.

The T2023-S$ Temasek Bond offers a fixed annual coupon of 2.7 per cent payable twice a year, with the principal to be repaid in 2023. Temasek is guaranteeing all these payments.

The subscription rate of the retail tranche was about five times the final public offer size of $300 milion, which was upsized by $100 million. The institutional tranche was just over seven times subscribed.

If you missed the public offer or did not get your full allocation, you can still buy the bond as it has been trading on the mainboard of the Singapore Exchange since Oct 26. However, do note that as it was trading at $1.017 a piece on Thursday, it translates to a yield of 2.47 per cent.

You can use your savings from the Supplementary Retirement Scheme and Central Provident Fund (CPF) to buy them.

Financial experts say the strong reception from retail investors was expected given the rarity value of an AAA-rated Singdollar bond issuance by a high-quality issuers. The last time Temasek tapped the local bond market was in 2010.