When Frasers Centrepoint (FCL) announced the issue of its 7-year, 3.65% retail bond on 12 May 2015, it was preceded by another announcement just a day earlier regarding the issue of a perpetual securities that carry a coupon rate of 5.00%. In fact, the perpetual securities were not the only bonds issued by FCL since its listing on SGX in Jan 2014. There were 2 other bonds, namely a 4.88% perpetual securities and a 7-year, 3.95% Fixed Rate Notes, both issued in Sep 2014. Thus, among all the bonds issued by FCL within a short span of 8 months, the 7-year, 3.65% retail bond has the lowest coupon rate. All other wholesale (i.e. non-retail) bonds have higher coupon rates. It raises the question whether retail investors have the poorer deal when it comes to new bond offerings.
Shortly after FCL's retail bond issue, Aspial, ...
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As a retail investor and have no 250k to spare at one go, I will have to accept a poorer deal if I want to buy the bond.
Noted. Even though wholesale bonds are too large for most retail investors, there will be a certain point when we just have to walk away from the deal. Don’t let the bond issuers take us for granted.
Rgds,
(The) Boring Investor