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Record S$96b in long-term corporate debt issued in S'pore for 2018: MAS

A RECORD volume of S$96 billion in long-term corporate debt was issued in Singapore last year, up 7.8 per cent from the previous year, the Monetary Authority of Singapore (MAS) noted in its Singapore Corporate Debt Market Development 2019 report on Friday.

This growth was driven by non-SGD denominated long-term corporate debt securities, as Asian issuers sought to raise international capital to finance regional and global growth, MAS noted in the report.

Long-term debt is defined as having a tenure of more than a year. For instance, Petron Corporation, the Philippines' largest integrated oil refining and marketing company, raised US$500 million via a perpetual.

The total corporate debt issued however fell 9 per cent year-on-year to S$236 billion in 2018. This was mainly due to a S$31 billion fall in non-SGD short-term debt issuances, notably commercial paper. 

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Of the total debt issuances for 2018, some S$210 billion or about 88.9 per cent were non-SGD denominated. This underscores "the strong international characteristics of Singapore's corporate debt market", MAS noted. 

Overall, Singapore's debt market has continued to grow, with total debt outstanding up 10 per cent year-on-year to hit S$424 billion. This represents a compounded annual growth rate of 8.3 per cent since 2014. Non-SGD debt outstanding in 2018 stood at S$271 billion.

Moving forward, MAS has identified green, social and sustainability bonds as a growth area, with these financing instruments helping "to channel capital towards sustainable investments".

"Singapore can serve the growing need for the financing of investments to support Asia's transition towards a low-carbon and climate-resilient model. There is growing recognition, within the region, of the potential of capital-market solutions," MAS said in the report. 

Earlier in February, MAS included social and sustainability bonds to its Green Bond Grant Scheme, which has been renamed the Sustainable Bond Grant Scheme. 

Under the scheme, issuers of green, social and sustainability bonds that obtain an external review are able to fully offset their external review expenses, subject to a funding cap of S$100,000 per issuance. 

Social and sustainability bonds have a "distinct yet complementary role to green bonds", with sustainability bonds delivering a mix of social and environmental benefits, MAS said. 

Singapore's green bond market stands at over S$6 billion today. Local issuers include City Developments and DBS, while foreign issuers include Canadian insurer Manulife Financial Corporation and the Indian Renewable Energy Development Agency.

"In the months ahead, we will continue to contribute to global initiatives to mainstream sustainable finance and look forward to supporting more companies in their efforts to raise capital for sustainable growth," MAS said.