Demand for latest Singapore Savings Bond falls after average returns slide to 3.07%

DEMAND for the latest Singapore Savings Bond (SSB) has fallen, according to allotment results posted on Wednesday (Dec 27).

There were applications for S$867.5 million of the bonds, just above the S$853 million which was allotted and applied within individual limits.

The tranche’s average return over 10 years was 3.07 per cent, while the first-year interest rate was 3 per cent.

This was the first time interest rates fell, after rising for the past six consecutive issuances.

In the previous tranche issued in December, the 10-year average return was 3.4 per cent – the highest interest rate posted for SSBs issued this year.

SSBs, which are issued by the Monetary Authority of Singapore, take their interest rates from the average yields of Singapore government bonds from the month before.

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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.

There was no quantity ceiling for the issuance this time.

The latest SSBs, which are the last of this year’s, will be issued on Jan 2, 2024, and paid out every six months.

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10-year average return on Singapore Savings Bonds hit new year-to-date high of 3.4%

Demand for latest Singapore Savings Bonds hits year-to-date high; 10-year average return at 3.4%

The first payment will be on Jul 1, 2024.