- The inaugural Green SGS (Infrastructure) bond offers investors an effective interest of 3.04% per annum. Maturing in 2072, investors will only receive their principal back after 50 years.
- If investors want to sell the bond before maturity, they would face interest rate risk and may incur a loss. In particular, a 50-year bond would be more sensitive to interest rate changes than those with a shorter maturity.
- As the first 50-year bond issued by the Singapore government, it is hard to tell what the liquidity of the bond would be like in the secondary market.
- We’d give the SGS Green (Infra) bond a miss as the yield is not attractive enough for us to invest in such a long-tenor bond given the risks.
We’d give the SGS Green (Infra) bond a miss as the yield is not attractive enough for us to invest in such a long-tenor bond given the risks.
TL;DR