A Trade Suggestion : HDB Bonds

It escaped my notice but I finally read something I wrote and a trade idea struck me.

Bond trade ideas do not come to me easily these days because,

1. I am not being paid to do this anymore
2. I do not want to risk being sued by someone acting on what I said and I am not supposed to dispense financial advice here because I am not sure I have done enough of those IBF modules (although age exempts you from a few of them)

So I read the Bonds : GSS Special and realise we have HDB 2.505 06/2024 at 3.68%. That is a 11 year paper for about 88.5 cts.


  • You may not think it is much but it is above 10Y and 12Y SGS. HDB is a stat board and 70% of the population lives in one, even if the government has not explicitly guaranteed the solvency of their business.
  • And the best part, the new government property loan measures do not apply to HDB Bonds so as far as I know, you can still get leverage of 70-80% on them.  (Assume you fund at 1.25%, on 80% leverage that is a yield of >10%)
  • Now you add that piece of information and compare it to another post I wrote Mixed Feelings About Reits and Reits Bonds and throw in the table I put in my SGD Rates and Bonds Weekly on the lack of supply of SGS, I think we are missing out here.
  • Banks will hold HDB bonds as a substitute to SGS as their reserve assets under Section 613 Subsection 4c. Link.
  • Discount bonds are also my favorites because of my silly fetish for the convexity trade. You feel good because you pay less for a low coupon bond compared to a high coupon one at the same yield. 😉
  • CPF pays the Ordinary Account 2.5% or the 10Y bond yield whichever the higher – 10Y bond is at about 2.62% today.
  • Finally, the curve is screwed up ! The 10-12Y interest rate is about 0.26% apart ! 10Y at 2.625 and 12Y at 2.99% – that is quite a lot difference. Thus the HDB 2022 and 2024 are quite set apart in their respective yields.

And so I followed my instincts and hunted for some HDB bonds and true enough, not a lot of offers out there – which means they are keeping the good stuff for themselves ? and asking you to buy something else.

List as follows. (Prices unverified)


Some other GLC names to consider (notice I did not include NOL ? haha)

KEPPEL LAND LTD 3.9% 07Nov24 130MM 3.9 7-Nov-24     94.00           4.46
SP POWERASSETS LTD 3.4% 19Sep32 250MM AA- Aa3 /*+ 3.4 19-Sep-32     91.97           3.93
KEPPEL CORP LTD 4% 07Sep42 300MM 4 7-Sep-42     89.00           4.56
NTUC INCOME INSURANCE 3.65% 23Aug27 600MM A+ 3.65 23-Aug-27   100.50           3.49
HOUSING &DEVELOPMENT BRD 2.505% 27Jun24 585MM 2.505 27-Jun-24     89.44           3.57
KEPPEL LAND LTD 3.8% 08Jun22 200MM 3.8 8-Jun-22     96.50           4.14
KEPPEL CORP LTD 3.8% 23Apr27 300MM 3.8 23-Apr-27     98.50           3.87
SINGAPORE POST LIMITED 4.25% 29Sep49 350MM A 4.25 29-Sep-49     99.50           4.21
KEPPEL CORP LTD 3.145% 14Feb22 400MM 3.145 14-Feb-22     98.00           3.31

And good luck with the US Non Farm Payrolls tonight – make or break the world as we know it.