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'Inevitable cascade' of O&G defaults seen

Oil-related firms face S$1.4b of S'pore dollar bonds maturing through 2018, with sustained weakness in crude raising risks

Published Mon, Aug 8, 2016 · 09:50 PM
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Singapore

SINGAPORE bondholders and lenders, already stung by Swiber Holdings Ltd's woes, face mounting pain as a drop in oil leaves more companies in the industry starved for cash.

Investment bank UOB Kay Hian warned last week that the sector may suffer a "cascade" of defaults. Bank of Singapore Ltd said that sustained weakness in crude prices could increase risks. Oil-related firms face S$1.4 billion (US$1 billion) of Singapore dollar bonds maturing through 2018, with S$325 million due by the year-end, according to Bloomberg-compiled data.

The borrowing that helped build one of Singapore's biggest export industries is showing signs of strain as crude has tumbled about 19 per cent from its high for the year in June. The pain is part of a broader global trend in which small…

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