ASTREA IV4.35%B280614: MY QUESTIONS AND QUESTIONS

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ASTREA IV4.35%B280614
Dear readers, Temasek’s first retail bond, Astrea IV bond commenced trading on the SGX yesterday. Astrea IV bond was very much oversubscribed due to the strong retail demand for decent yields versus low risk. And the strong appetite simply flowed through to the SGX as Astrea IV bond closed 1$.037 above PAR yesterday (intra lowest at 1.02 and intra highest at 1.04).
Well, I did not apply for Astrea IV bond before its trading debut though I was somewhat tempted by the seemingly decent risk versus return portfolio initially. Thereafter, I thought since I did not really know the businesses of Astrea IV bond because it is not really a focused bond per se, I would not invest in it.

Business apart, I also still do not know what the dividends of Astrea IV bond would be like after listing and trading on SGX. Does it mean if I have gotten 1,000 shares at $1 per share and yesterday Astrea IV bond closed at $1.037, I would still get 4.35% of $1,000 investment or would I get 4.35% dividends of the closing price at $1.037 (if so I should get higher than 4.35% with the same capital of $1,000). And does that mean an investor aiming for 4.35% dividends to be paid in the first day could (assuming he is allocated 1,000 bonds at $1 per bond) get the same profits as this dividends if he sells the bonds at $1.0435 once the bond reaches this price (and the investor needs not wait for a year to achieve the 4.35% dividends)?

Questions after questions, thus is it no wonder I did not apply for Astrea IV bond? Simply put, I do not know how this bond works. Anyway, with interest rates going up, we should see more high interest products. Join the emailing list to receive regular Financial and Singapore stocks newsletters too! Like" me on Singapore Stocks Investing Facebook page to receive all posts on your Facebook as well as read more articles. Follow me on Twitter too.

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