Temasek Bonds

Our Temasek Bonds and short dated Euro-commercial Paper (ECP) provide a flexible balance between long and short term funding.

As at 31 March 2017, we had S$11.6 billion of Temasek Bonds and S$1.2 billion of ECP outstanding.

All Temasek Bonds have been rated AAA/Aaa by S&P Global Ratings (S&P) and Moody’s Investors Service (Moody’s) respectively. Our ECP programme has been assigned short term ratings of A-1+/P-1 by S&P and Moody’s respectively.

The information in our Credit Profile is based on Temasek’s financial position as an investment company. It is a quantitative snapshot of our credit quality. It is not a recommendation to buy or sell our Temasek Bonds or ECP.

Temasek Bonds - Maturity Profile and Coupon


Investing in Bonds

From time to time, a company may issue bonds – borrowing money directly from investors via the bond markets. In return, the company pays its bondholders a ‘coupon’ – an interest rate on the money they have invested in the company’s bonds.

When the bond matures following the end of the tenor or borrowing period, bond investors expect to be repaid the principal sum that they had invested upfront.

In general, the stronger the credit quality of the issuer, the lower the coupon of the bond issued. Bond investors should assess the credit quality of the bond issuer based on its credit profile.

All investments carry risks. Investors need to understand the risks and balance them against their desire to earn higher returns. The key risks for bond investors include credit risk, interest rate risk, liquidity risk and inflation risk.

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A bond issuer may be unable to pay interest due or repay the principal sum.

For example, an issuer may have cash flow problems, or in the worst case, may be facing bankruptcy.

Interest rates may change and affect the value of a bond.

For example, if interest rates rise, bond prices will likely fall. Investors could make a loss if they need to sell their bonds before maturity.

Sometimes, an investor may not be able to find a buyer for his or her bonds.

For example, some bonds may be traded infrequently. An urgent seller may have to sell at unattractive low prices, at a lower profit or at a loss.

The coupon payments plus principal sum repayment of a bond may not keep pace with inflation.

For example, when inflation increases, the fixed coupon payment would be worth less.

A bond issuer may be unable to pay interest due or repay the principal sum.

For example, an issuer may have cash flow problems, or in the worst case, may be facing bankruptcy.

Interest rates may change and affect the value of a bond.

For example, if interest rates rise, bond prices will likely fall. Investors could make a loss if they need to sell their bonds before maturity.

Sometimes, an investor may not be able to find a buyer for his or her bonds.

For example, some bonds may be traded infrequently. An urgent seller may have to sell at unattractive low prices, at a lower profit or at a loss.

The coupon payments plus principal sum repayment of a bond may not keep pace with inflation.

For example, when inflation increases, the fixed coupon payment would be worth less.