Singapore Savings Bond demand falls short; 10-year average return drops to 2.56%

[SINGAPORE] The latest Singapore Savings Bond (SSB) allotted on Wednesday (May 28) saw applications fall short of the S$500 million offered, with the 10-year average return dropping from the previous tranche.

The June tranche of the Singapore government-backed bonds received a total of S$302.9 million in applications for the amount on offer. A total of S$275.6 million was applied within individual allotment limits, and this amount was fully allotted.

In comparison, the previous issuance for May saw a total of S$431.5 million in applications, falling short of the S$700 million on offer by S$268.5 million.

The latest tranche offered a first-year interest rate of 2.2 per cent, a drop from the 2.49 per cent offered by the May issuance. The 10-year average return for the latest tranche was 2.56 per cent, down from the preceding tranche’s return of 2.69 per cent.

SSBs take their interest rates from the average yields of Singapore government bonds from the month before.

Earlier on May 7, the US Federal Reserve announced its decision to keep interest rates in the range of 4.25 and 4.5 per cent, where it has been since December 2024. The next US Fed rate interest rate decision will be on Jun 18.

Applications for this tranche closed on May 27, with the bonds set to be issued on Jun 2.