Singapore corporate perpetuals weaken; analysts see market holding up for stronger issuers

SINGAPORE’S corporate perpetuals have weakened in the aftermath of Credit Suisse’s debt wipeout, but not by much. Market watchers do not expect the impact to be long-lasting, and said corporates should still be able to tap the perpetual credit market – albeit at higher rates and under tougher scrutiny.

“In terms of second-order impact to the Singapore corporate perpetual market, so far the main impact is on secondary prices, where market participants have become more defensive, leading prices to drift down somewhat,” said Ezien Hoo, credit research analyst at OCBC .

She added that there has not been a significant contagion from the banking space into the non-bank corporate sector, possibly because investors, traders and other market participants are aware that corporate perpetuals are different from Additional Tier-1 (AT1) bonds.