capitamalls retail bonds?

another blog reader has inquired on the latest retail bond offering issued by capitamalls asia treasury limited (a wholly-owned subsidiary of capitamalls asia limited).

my comments:

there are 2 offerings namely:

a. 1-year retail bonds: 1% p.a.

issue size of up to s$100 million in aggregate principal amount of 1-year
bonds, subject to the issuer's right, in conjunction with the lead manager
to issue up to an additional s$100 million in principal amount of 1-year
bonds.
maturity date of january 21, 2012
interest of 1% per annum
interest payment date: january 21, 2012
issue price: s$1 per s$1 in principal amount of the 1-year bonds
minimum application amount: s$2,000

b. 3-year retail bonds: 2.15% p.a.

issue size of up to s$100 million in aggregate principal amount of 3-year
bonds, subject to the issuer's right, in conjunction with the lead manager
to issue up to an additional s$100 million in principal amount of 3-year
bonds.
maturity date of january 21, 2014
interest of 2.15% per annum
interest payment date: january 21 in each year
issue price: s$1 per s$1 in principal amount of the 3-year bonds
minimum application amount: s$2,000

note: if the payment date falls on a saturday/sunday and/or public holiday,
payment will be made on the previous working day without deducting any
interest.

my comments:

with the current low interest rate environment, and with consumers flushed with cash coupled with year-end bonuses, this offering should appeal to the masses and i shouldn't be surprised both issues to meet with healthy oversubscriptions. but please take note both offerings are open to cash only.

there is another option that should merit consideration in the form of sing dollar fixed deposit by icici bank (http://www.icicibank.com.sg/pb_fd.htm) with one of the highest yields for 12 month tenure coming in at 1.0% to 1.50% dependent on the amount deposited. and for the 36 month tenure, the yield ranges from 1.60% to 2.20%, and again dependent on the amount placed with the bank. these rates are effective from january 01, 2011 and may change without notice.

note: no vested insterests. this blog is for information only and is not meant to be investment advice. readers should consult their own legal, tax, accounting, financial and other professional advisers to assist them in determining the suitability of the products.