More firms likely to seek easing of debt covenants next year

Singapore

MORE companies next year are likely to ask bondholders to relax financial convenants as the economy gets more challenging, said a fixed income banker.

In the last quarter of 2015, several companies have begun negotiating to "loosen their convenants", said Tan Kee Phong, head of capital markets, OCBC Bank. "Markets are more volatile this year," he said at a media briefing on Tuesday. Marco Polo, Tat Hong, Otto Marine and Dyna-Mac are meeting or about to meet investors to get them to "consent to a cure", he said, adding that companies are generally asking for easing of gearing and interest cover convenants.