Astrea 8 Bonds Balloting Results are out!
The full balloting announcement is here.
But the results are interesting enough that I wanted to do a quick summary, and share some personal thoughts.
How much applications were received for the Astrea 8 Bonds?
Per the official SGX announcement (emphasis mine):
For the Public Offers, the Issuer received valid applications over S$763 million for the Astrea 8 Class A-1 Bonds and US$194 million for the Astrea 8 Class A-2 Bonds as at the close of offer at 12 noon SGT on 17 July 2024, from a total of 27,287 and 9,894 valid applicants respectively.
This is equivalent to about 2.9 times subscription rate for the Class A-1 Bonds and about 3.9 times for the Class A-2 Bonds. More than 76% of the bonds under the Public Offers were allocated to valid applicants who applied for less than S$50,000 for the Class A-1 Bonds or US$50,000 for the Class A-2 Bonds.
So to sum up.
The Class A-1 (SGD) Astrea 8 Bonds had a $260 million public offer – and saw $763 million in applications.
This was 2.9 times subscribed.
The Class A-2 (USD) Astrea 8 Bonds had a US$50 million public offer – and saw US$194 million in applications.
This was 3.9 times subscribed.
Objectively, the Class A-1 SGD Astrea 8 Bonds still saw higher application amounts
Yes the Class A-2 was 3.9 times subscribed, vs 2.9 times for Class A-1.
But objectively, the Class A-1 saw a total of $763 million SGD in application.
Even converted into USD terms, that is 2.9 times the application amount we saw for Class A-2 Astrea 8 Bonds.
In my weekend article I shared my views that I thought the Class A-2 Astrea 8 Bonds were more attractive because of the higher yield spread vs the risk free rate.
And I myself applied for more of the Class A-2 Astrea 8 Bonds.
Whatever the case, it’s fairly clear that Singapore investors still prefer the safety of the SGD, hence the significantly higher application amounts for the SGD Class A-1 Astrea 8 Bonds.
How much allotment of Astrea 8 Bonds per investor – Balloting Results
Per the official SGX announcement (emphasis mine):
For Class A-1 Bonds, all valid applicants who applied for less than S$50,000 of Class A-1 Bonds received allocations either in full or in part. More than 74% of the Class A-1 Bonds were allocated to these applicants, and those who applied for S$9,000 or less received full allocations.
For Class A-2 Bonds, all valid applicants who applied for less than U$50,000 of Class A-2 Bonds received allocations either in full or in part. More than 85% of the Class A-2 Bonds were allocated to these applicants, and those who applied for US$4,000 or less received full allocations.
Balloting was conducted for applicants who applied for S$50,000 or more for Class A-1 Bonds, and US$50,000 or more for Class A-2 Bonds, to provide them with a more meaningful allocation. 93% of valid applicants of Class A-1 Bonds and 96% of valid applicants of Class A-2 Bonds received allocations.
The detailed breakdown of the Balloting table is set out below, after which I’ll share my personal views.
My personal thoughts on the Astrea 8 Bonds Balloting Results?
Personally I applied for more of the Class A-2 USD Astrea 8 Bonds.
But because of the balloting results, I actually ended up with more of the Class A-1 SGD Astrea 8 Bonds.
Pretty ironic when you think about it.
That said, because of the sharp drop in the Singapore 10 year yield the past few days to 3.0%.
The yield on the Astrea 8 SGD Bonds at 4.35% actually works out to a 1.35%ish spread vs the risk free.
This has improved since my original analysis last week, which in some ways makes it a “better” buy.
No complaints from me though.
While I would have preferred a larger USD allotment, I think the eventual allotment results are acceptable.
When will the Astrea 8 Bonds be listed? Under what stock code?
Per the official SGX announcement:
The Astrea 8 Class A-1 Bonds and Class A-2 Bonds will commence trading on the Singapore Exchange Securities Trading Limited (“SGX-ST”) at 9:00am on Monday, 22 July 2024.
The Class A-1 Bonds will trade on the Mainboard under the trading name “Astrea8A1 4.35%390719” with SGX-ST stock code “Z1AB”, in board lot sizes of S$1,000.
The Class A-2 Bonds will trade on the Mainboard under the trading name “Astrea8A2 6.35%390719” with SGX-ST stock code “Z2AB”, in board lot sizes of US$1,000.
Some of you have asked me whether we will see a “pop” in the bond prices on trading day.
Not an easy call, but gun to my head – I think you may see a slight increase for the USD bonds, but probably flat for the SGD bonds.
Let’s see though!
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