MAS offers S$300m of Singapore Savings Bonds for January, targets S$4b for 2016

INVESTORS can buy up to S$4 billion of Singapore Savings Bonds in 2016, with up to S$300 million on offer for the January series, the Monetary Authority of Singapore (MAS) announced on Tuesday.

Applications for the January series is open from 6pm on Dec 1 to 9pm on Dec 28.

The 10-year puttable bonds will pay a coupon of 1.21 per cent in the first year, stepping up every year to a final coupon payment of 3.69 per cent in the final year. If held to maturity, the average annual return of the bonds will be 2.58 per cent after the 10th year.

The bonds may be redeemed each month at the option of the bondholder. The coupon payments are calculated to reflect the current yield curve at the time of purchase. A savings bond bought today and held for five years would therefore yield an average annual return comparable to a five-year plain-vanilla Singapore government bond that was bought today.

The savings bonds may only be bought by individuals, and may not be sold or pledged without prior approval from the MAS.