In recent years, financial markets have become
increasingly polarised between growth and security.
Investors looking for a medium-to low-risk route to income
in-vesting are increasingly turning to the corporate bond
market as an alternative to equities and government bonds.

　Equities and government bonds are well suited to some
investors. Younger in-vestors will benefit from equity
capital growth because they are generally invest-ing for the
longer term and not unduly concerned at the lack of
immediate yield. Investors concerned with avoiding risk will
be prepared to accept the relatively low yields now
available on government bonds.

　But many investors fall somewhere be-tween these two
extremes. Corporate bonds offer an alternative to equities
and government bonds, providing some of the benefits of
each. With corporate bonds, an investor can opt for a lower
risk exposure than with equities but a higher income yield
than with government bonds.

　In Singapore, for example, a govern-ment bond maturing in
2004 with a cou-pon of 3.5% will currently yield about 3.4%.
This is to say, for every S$100 of face value, the bond is
currently selling for S$100.50, so that the annual coupon of
S$3.50 is worth about 3.4% of the actual price.

　By comparison, the Ford Motor Cor-poration's bond issued
in Singapore dol-lars and therefore carrying no currency
risk for a Singapore investor also matures in 2004. It
carries a coupon of 4.5% but currently sells at slightly
below its face value, at around S$99.50 per S$100 of nominal
value.

　This means that the yield for an investor is a little
higher than the coupon, at around 4.6% of the actual price.
The difference between two yields is commonly called the
'spread'. At the moment, as we see, the spread between Ford
and Singapore gov-ernment bonds is around 1.2%. This
rep-resents the reward to the investor for ac-cepting the
somewhat higher risk attached to Ford as opposed to the
government of Singapore.

　This is a wider spread than Ford would expect to pay in
the US or Europe. Ford may be willing to pay this extra at
present as a means of building goodwill among Singapore
investors, which it hopes will be to its benefit in later
years.

　The main disadvantage of corporate bonds is that an
investor only indirectly participates in the company's
success, through its credit-worthiness, but other- wise will
not benefit from corporate ex-pansion in the way that equity
holders will has no participation in the company's suc-cess.
On the other hand, absolute risk is lower than for equities
because coupon payments cannot be waived and, in the event
of a default, bondholders are ranked highly among creditors.

　However, corporate credit-worthiness is a key factor in
assessing the value and risk of corporate bonds. Credit
rating a-gencies play an important role in this pro-cess.
The two main agencies are Moody's and Standard & Poors. They
assign ratings both to entities issuing bonds and to
spe-cific corporate bond issues. This gives in-vestors a
guide as to their credit quality, which indicates the risk
that the terms of the bond will not be fully honoured.

　Moody's has three levels of prime or investment grade
ratings, divided into 10 subsidiary levels, from Aaa, the
top Prime-1 rating, to Baa3, the bottom Prime-3 rating.
Moody's then has three non-Prime or speculative grade
ratings, divided again into 11 subsidiary levels, from Ba1
to C. Standard & Poors uses a very similar system, starting
at AAA and ending at D, which indicates an issue in
distress.

　Liquidity is also an important factor. Investors should be
generally aware that corporate bonds, even in mature markets
such as the US and Britain, have fairly li-mited secondary
markets. This is to say, unlike equities or government
bonds, they cannot always be sold on easily to other
investors. Lack of liquidity tends to be more pronounced in
a less developed cor-porate bond market such as Singapore,
and this is a further factor in pushing yields higher for
corporates, relative both to the government and to other
markets.

　As the Singapore corporate bond mar-ket is relatively new,
these few names comprise most of the bonds currently in
issue. As the market develops, investors will be offered a
wider choice of risk/return combinations. This has been
demonstrated in the US where a non-investment grade segment
of the corporate bond market has developed, offering
in-vestors riskier corporate bond investments at much higher
yields.

　The corporate bond market in Singa-pore is likely to
develop in both the va-riety of stock available and the
liquidity of the secondary market. The development is
expected to be strongly demand-driven, with diversified
investors increasingly looking to the corporate bond market
for yield. Although corporate bonds carry more risk than
government bonds, that risk can be controlled to a large
extent by credit analysis and other checks on the is-suer
and the terms of the bond. In return investors have the
opportunity to achieve a good cash income.

(The writer is Managing Director, Mor-ley Fund Management
Singapore Ltd. This column has the support of the Investment
Management Association of Singapore and the Stock Exchange
of Singapore. )
　　
公司债券的新机会　

　　近几年的金融市场，在追求增值与安稳之间越来越有两极化的趋
势。为收入而投资，但只接受中低风险者，很多都转向公司债券，以
替代股票和政府债券。

　　股票和政府债券很合一些投资者胃口。年轻投资人士一般从股票
的资本增值中获益，因为他们通常是长线投资，不太在意眼前的收益
。要避免风险的投资者，则愿意接受政府债券目前提供的相对低收益。

　　但很多投资者介于两者之间。公司债券是股票和政府债券的替代
品，两边的好处都有一点。这类投资的风险不比股票大，收益又高出
政府债券。

　　举例说，在新加坡，一个2004年到期，息票利率为3.5%的政府债
券，目前能提供的收益大概是3.4%。也就是说，每100新元票面价值
的债券，现售价为100.50元。所以年息如果是3.50元，便是实价的大
约3.4%。

　　相比之下，福特汽车公司以新元发售——因此对新加坡投资者来
说没有汇率风险的债券，也是2004年到期。它的息票是4.5%，不过现
售价稍微低过票面价值，票面价值每100新元售99.50新元。

　　这意味着投资者能获得较政府债券稍微高一点，约为实价4.6%的
收益。两者差距一般称为利差。在我们看来，目前福特和新加坡政府
债券的利差是1.2%左右。这个利差，就是投资者接受了福特债券比新
加坡政府债券多出一些风险的回报。

　　如果是在美国或欧洲，福特汽车须支付的利差预料少一点。福特
汽车这时愿意多给，可能是想讨好新加坡投资者，希望日后有所收获。

　　公司债券的主要缺点，是投资者只能通过可信贷程度，间接分享
公司的成果，而不能像股票持有者那样，从公司的扩充中获益。另一
方面，这些债券投资者承担的绝对风险却又低于股东，因为息票的付
款是不能勾销的，而在公司无法还债时，债券持有人的债权，有很高
的优先权。

　　不过，要评估一家公司债券的价值和风险，主要因素在于该公司
的可信贷程度。信贷评级机构在这个过程中扮演吃重角色。穆迪和标
准普尔是主要的两家机构。它们给发售债券的公司和个别公司债券评
级。这些级别，给了投资者有关信贷素质的参考，显示了债券条款没
有全部被履行的风险有多大。

　　穆迪在优质或投资级方面的评级有3个。其中，从最高优质1级的
Aaa，到最低优质3级的Baa3共有10个等次。穆迪的非优质或投机性的
评级也有3个，其下又分11个等次。标准普尔使用大致相同的系统，
从AAA到最后表示债券出问题的D。

　　流通性也是一个重要因素。投资者须了解就算是美国或英国这类
成熟的市场，公司债券的二手市场也是相当小的。也就是说，和股票
或政府债券不同，要转售给其他投资者并不容易。像新加坡这类公司
债券市场开发度较低的地方，缺乏流通性更为显著。这也是推动公司
债券的收益，使它高于政府债券和其他市场的额外因素。

　　新加坡的公司债券市场预料会得到发展，以致证券种类更多，二
手市场流通性更大。由于越来越多性质不同的投资者，为取得收益而
投入到公司债券市场，发展的推动力相信来自强劲的需求。

　　公司债券的风险虽然大于政府债券，但在很大程度上，可借助信
贷分析，以及对债券发售者和债券条款的其他制衡手段加以控制。而
投资者则有机会取得不错的现金收益。