High Yield Corporate Bonds : Few And Far Between
Singaporeans are a suspicious lot. Give them a high yield, under subscribed issue and they will run. If you give them a low yield, over subscribed issue, its ok even if the bond tanks.
On this leisurely public holiday, I decided to dig up whatever 6% yielder I can find out there. The results are surprising, to me at least. There are not many bonds giving us 6% out there and I took the liberty of removing the 2 Lehman defaulted papers which presented some impossible 6000% yield. I also excluded the recent high yield issues that are highly illiquid.
Out of the 14 bonds, over a third are Olam and a handful of perps. Note Olam has the courtesy of Temasek’s stake while GIC owns a small share of Tata Steel.
I daresay I missed out some, like Ezra perpetual and the new issues in Hankore, Perisai and United Envirotech given the impossibility of obtaining reliable pricing. Let’s keep them at the back of our heads for now.
Yet somehow, I feel that this list should really be longer to include some potentially over valued issues, in my opinion. But if no one is really crying over it, including all the investors who had bought into Tata Steel and losing over 16% of their capital, I will rest my case.