A new norm for SGD corporate perps

THE Singdollar corporate bond market is a lot less frothy now than it was a year ago, but the past does leave a legacy.

One feature unique to the Singapore market is the growing number of wholesale perpetual securities which sport first call dates that don't coincide with their coupon reset or step-up dates.

The reset date refers to the date when the coupon on the perps is reset based on the benchmark swap offer rate (SOR) plus a spread. With swap rates on an upward path as the US sets the pace for more rate hikes, coupon resets create an incentive for issuers to redeem their perps sooner rather than later.