Perpetual bonds back in favour

Singapore

PERPETUAL bonds are enjoying a massive revival as investors turn to them for their higher yields, ignoring the broader market anxiety over rising interest rates.

On Wednesday, Ezion Holdings sold S$150 million perpetual bonds offering a 7 per cent coupon, the eighth such deal this year. The issue received S$300 million in orders.

This brings the amount raised by perpetuals so far this year to S$1.825 billion - a far cry from just two deals worth S$400 million for the whole of 2013, when the fixed-income market was roiled by interest rate volatility due to quantitative easing (QE) tapering fears.

"Sentiment in the bond market has remained generally positive for some time now. So perps from appropriate issuers are once again welcome in the market as investors …