10-year average return for latest tranche of Singapore Savings Bonds falls to 3.07%

THE 10-year average return of the latest Singapore Savings Bonds (SSBs) tranche has fallen after a spike in the yields last month.

The May tranche of the SSBs, which opened on Monday (Apr 3), is offering a 10-year average return of 3.07 per cent, down from 3.15 per cent the month before.

The first-year interest rate of 3.03 per cent, however, is higher than the April tranche’s 3.01 per cent.

SSBs drew strong investor interest last year, as their coupon rates rose alongside rising interest rates. But interest has waned in recent months, as yields also dipped on lower rate hike expectations.

Nevertheless, April’s issuance saw a rise in demand as the tranche offered a higher yield than previous tranches. The auction also closed with higher demand amid turmoil in the banking industry, due to the collapse of Silicon Valley Bank in the US and Credit Suisse in Europe, among others.

The May issuance has some S$700 million on offer, which closes on Apr 25. It will be allotted on Apr 26, and successful applications will be issued on May 2.

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

SSBs take their interest rates from the average yields of Singapore government bonds from the month before. They are, however, subject to adjustments to ensure that interest rates do not dip over time for inverted yield curves, in which the yields of short-dated bills exceed those of longer-dated bonds.