A short one.
Keppel Land 12Y New Issue
Keppel Land did a SGD 200 million 10Y issue in May this year at 3.8%. 10Y interest rates were 1.95% then. It’s price rose to 100.50 or thereabouts till the new issue was announced today.
Now the old Keppel Land 10Y 3.8% 06/2022 is under 100 and 10Y interest rates are 1.78%.
The best part is that the new Keppel Land 12Y is only giving a coupon of 3.90% and 12Y interest rates are …….. 2%.
Do your own math.
The old Olam 10Y 6% 10/2022 came out just 2 weeks ago which made the 7Y Olam 5.8% 07/2019 look good (now trading at about 5.43%).
The 6% coupon was a teaser and was well received despite an initial coupon of 6.25%. Now they have issued SGD 1.275 billion in SGD alone this year.
But if you ask me which is the best Olam paper to own. I would say the Olam USD 5Y 5.75% 09/2017. The paper would give you about SGD 5.38% if you swapped it from the USD for just 5Y.
Then again, Olam has another SGD 623 million worth of debt maturing next year. I am sure we will be seeing them around.