Defaults in Singapore highlight the valuable role that ratings can play
Add BT as a preferred sourceCREDIT rating companies still haven't fully shaken off the bad reputation they got during the 2008 financial crisis, in spite of increased transparency regarding their decision-making. Singapore is offering the perfect public relations how-not-to guide when it comes to showing the valuable role that ratings can play.
Swiber's court-directed effort to survive marked the third time bondholders in the city-state have gone unpaid over the past 12 months. Of the S$875 million of corporate bonds that have defaulted in the past year, not a single one of the issuers was rated, and most securities went to high-net-worth individuals who aren't always rigorous in checking the financial health of a borrower.
As a result, when things went pear-shaped, the price of those notes dropped very quickly and buyers were thin on the ground, making it nearly impossible for creditors to recover any money.
