US 10-Year Treasury Yield Hits Record Low of 1.65%

[Coattails]

Assuming these bonds are available for retail investors in small allotments.

if it is euro crashed bonds could be pennies to the dollar and if a countries with a poor rating but still able to issue them I imagining yields could go as high as 15% - 20%

why not? who will pay you 20% on the dollar in this kind of climate ?

they may default for a while but is not like they going to disappear from face of the earth, once they get their act together and ratings start to improve won't they start paying again?

Maybe exception for greece since I see they don't have the will to pay off the debt yet want to be in euro my prediction is if they cannot form a government apart from them leaving or getting booted out of the euro I think the greek mafia will start running the show there and after a few years another military coup again one sponsored by the US or supported by the european union or both and then forced to pay back thru that way.

Singapore Government Securities (SGS) are available to retail investors in small denominations of 1,000, but you would probably need to qualify and declare yourself as an sophisticated investor to buy sovereign bonds of foreign governments, cuz MAS as the financial regulator gotta cover their own behinds, right?

As for whether the countries with poor rating are able to pay you back, many potential outcomes are possible and it is really hard to predict what happens. E.g. they may force a steep haircut on face value (so if you buy really really cheap like 30-cents on the dollar and they cut face value by 50%, you come out on top, but if you buy 70-cents and they cut 50% then you lose) and concurrently their currency may drop 50% against the SGD resulting in FX losses to you. If we are talking about a country currently on the Euro but moving back to their own currency in the future, the currency depreciation scenario is almost guaranteed. They may also cut the stated coupon rate to lower their interest burden. The key point is that it is possible for governments to negotiate and change the original terms of the bonds when the country is on the verge of going under.

Or they can just default on their bonds outright, which I believe is what the Russian government did in late 90s (can't remember the full details) triggering the collapse of LTCM, the largest quant hedge at the time. History is full of examples of countries defaulting or undergoing debt restructuring. Can a retail investor really come out on top so easily? Think there are easier and safer ways to invest.