MAS to auction $2 billion of 20-year SGS bond

On 27 August MAS will auction $2 billion of a new 20-year SGS bond with effective issue size of only $1.8 billion.

“This is on the low side of market expectations for a new benchmark issue as the last new 20-year issue size was $2.5 billion of which MAS kept $300 million. The tender closes at noon on Friday 27 August, and should be fairly well-received given the heightened global risk aversion theme due to slowing economic growth, record US Treasury bond rally, the smallish issue size, still robust demand for SGD-denominated assets, and with the SGD NEER still trading on the stronger side of its parity band,” said OCBC.

The 20-year SGS bond yield is expected to fetch around 2.9-3.0% given the dominant global slowdown and risk aversion theme.

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