It is easy to be attracted to the high coupon rate of Aspial’s 5-year, 5.25% bond, especially when the offering is splashed over the front page of newspapers. I too have made the mistake of not checking whether a bond is safe to buy when I applied for Frasers Centrepoint’s (FCL) 3.65% bond 3 months ago, despite having written about how Benjamin Graham would analyse the safety of a bond in The Lost Art of Bond Investment.
So, this time round, I got smarter and analysed Aspial’s bond before deciding whether to apply for the bond. There are 2 criteria that Benjamin Graham used, namely, the minimum average earnings coverage and the minimum current stock value ratio. Using Aspial’s latest Financial Year’s results, the computation of the 2 ratios are as follow.
Earnings Coverage

Profit before tax = $61.7M
Adjusted for:
– Deduct: Non-recurring fair value gain …