Bonds In Conversation : Always A Borrower And Lender Be, Let Shakespeare Burn In Hell

And so Greece returns to the bond markets as we have had a busy week of IPOs and issuances. Lebanon 5Y, Pakistan 5Y and 10Y, Sri Lanka 5Y and I suspect you could have slipped Ukraine in there and somehow it could be oversubscribed too. Interesting to note that several of the US IPO companies are loss making ones that promise future profits.

The irony of Greece’s success is not lost as Sweden failed to auction their entire issue at the same time which gives new meaning to compassion and second chances.

So we had a mini rout in the developed stock markets which drove more money to EM, where EM bond funds saw their largest inflows since last May. Nikkei suffered as usual, throwing the -7.33% down tantrum that Abe will seek to sooth and China promising great things to come out of their slow down which led to a +4.25% rally instead. Thus we had some financial market suicides and deaths which has become a clear trend with more than half dozen deaths this year and I am wondering how many were caused by USDJPY.

Suicides & Killings :
HK –
Holland –
Liechtenstein –

I am not so certain about the stock market sell off yet because this is supposed to be the biggest week for US IPOs with 16 scheduled, a number not seen since 2006.

Hopefully, we will have more assurance out of Fed speak next week and by now we can see how sadly impotent the other central banks are, in the big scheme of things. It is a fact that is not lost of former Goldman Sachs, now Reserve Bank of India governor observed a potential breakdown between central banks cooperation.

Yet the sheer confidence we all have in the central banks to make it work out, that we live in a default free world.

The 10Y US treasury has just broken into a down trend, with its 50 day moving average crossing the 100 day, as the market awaits the usual routine clockwork pattern of central bank assurances in the days ahead or they will get the message in their feedback loop.


I am expecting lower US treasury yields but should we expect the same for corporate bonds ?

The answer is yes, this time, for a whole variety of reasons, the main one being that swap spreads are not under threat right now, which means that markets are comfortable with credits in general. The appetite for the issues we have seen so far this week have been fantastic.

OCBC’s issue which is just the tip of their borrowing needs saw an amazing rally from its announcement at 10Y UST +265 bp, to its pricing 0.2% lower at +245 bp and then post issue rally to T+227 bp (now back at T+235).

Singapore saw a high yield issue chased into a low yield one out of Gallant Ventures issuing a 2 year paper at an initial coupon of over 6% but over subscribed up to 900mio which resulted in a 5.95% coupon but rallied another 0.4% post issue as if it were the last piece of good news we will have for the year.

I have a sinking feeling that if anything goes wrong with Gallant’s venture in Bintan (which is not as hot as Iskandar these days), bond holders are going to be asking if MAS will do a bail out or even, Temasek ? That was a question I was asked in the old days with Olam, and voila, it did happen.

And it probably has nothing to do with the news I am hearing that banks are offering leverage of 60% to buy this paper which makes it potential return about 13% based on a borrowing rate of 1%.

Go ahead, borrow away just like Greece and be loved for it. Because the only lesson we have learnt it seems, it that it is always good to Always A Borrower and Lender Be, to let Shakespeare burn in hell.

Sorry for the late posting. I am still battling the flu without the aid of drugs which reminds me very, very starkly of an economy surviving without QE.

Leaving you with the prices.


USD Bonds listed in HK and SGX


2014 SGD Bonds


2013 SGD Bonds