Key in mind throughout this discussion that there is a macro theme of rising interest rate and this would most likely begin in December.
Quick thoughts:
1. November issue is the best of the 3
2. December offering is very dismal in the mid to long term (Nov issue dominates it all the way while Oct issue dominates it all the way from 3rd year onwards - see chart 1 to understand fully)
3. You always have options for this unique asset class (subscribe or redeem or do nothing)
You are likely to be in 2 positions
1. The new subscriber
2. The one who subscribed OCT or NOV (or both)
| Year | 1st | 2nd | 3rd | 4th | 5th | 6th | 7th | 8th | 9th | 10th | Issue Amount |
| GX15100F (Oct) | 0.96 | 1.09 | 1.93 | 2.93 | 3.25 | 3.25 | 3.25 | 3.25 | 3.3 | 3.7 | S$413.161m |
| GX15110F (Nov) | 1.18 | 1.2 | 2.06 | 3.1 | 3.4 | 3.4 | 3.4 | 3.4 | 3.44 | 3.83 | S$257.3285m |
| GX15120F (Dec) | 1.15 | 1.15 | 1.65 | 2.41 | 2.81 | 2.81 | 2.93 | 3.08 | 3.29 | 3.64 | Not Avail |
 |
| Chart 1 |
 |
| Chart 2 |
If you are a new subscriber:
In this case - look at the following yield curve (chart 1 & 2) - you would know why this month issue is probably not a good buy as the overall yield is lower than the first 2 issues.That being said if your holding period is only 2 years, it makes sense to subscribe now and sell it by the end of year 2. You would have been better off than the October subscriber.
P.S. If you are holding for 2 years, go put it in a fixed deposit instead.
If you are an OCT or NOV subscriber
Consider your investment horizon. If you are eyeing 2 years before selling the bond, you may want to redeem and take up the December issue. Although consider your opportunity cost given that the yield is increasingly higher the longer you hold the bond. Otherwise, I would advice just to hold on to your bonds (Oct and Nov) and don't touch the Dec issue.In conclusion, its all about your timing and the opportunity sets - always ask yourself, 'what is your investment horizon and risk appetite?'.
The author expects december to be severely undersubscribed if any (<S$100m probably).
Cheers!
TFG
