Singapore corporate debt issuance rises 39% to S$259b in 2017

SINGAPORE'S corporate debt market grew strongly last year, with total debt issuance rising 39 per cent to S$259 billion in 2017, up from S$186 billion in 2016, data from the Monetary Authority of Singapore's (MAS) latest Corporate Debt Market Report shows.

Growth was underpinned by the increased issuances of both SGD (Singapore dollar) and non-SGD denominated debt securities, which rose by 30 per cent and 40 per cent respectively.

In particular, SGD debt securities issued reached a five-year high of S$27 billion, catalysed by strong investor sentiment, and issuers seeking to secure longer-term funding ahead of the expected rate increases, the MAS said.

Singapore's debt market also continued to support issuers' funding needs in foreign currencies, with companies raising funding in multiple currencies including the greenback, euro, pound sterling and other Asian currencies. Non-SGD debt issuance accounted for 89.4 per cent, or S$232 billion of total debt issuances last year, broadly in line with 2016.

Meanwhile, repeat issuances drove issuance volumes, contributing well over 80 per cent of total issuance volumes in 2017. The number of repeat issuers also rose to 103 in 2017, from 85 in 2016.

On the other hand, volumes from first-time issuances nearly tripled to S$27.4 billion last year, up from S$10.2 billion in 2016. The number of first-time issuers increased to 63 in 2017, from 37 in 2016, reversing the declining trend observed over the last few years.

According to the MAS, many of these first-time issuers from Australia, China, India and Asean came through the Asian Bond Grant Scheme. Notable issuers include Indonesian power producer, PT Paiton Energy, which issued a US$2 billion dual-tranche infrastructure project bond with a maturity of 13 and 20 years; as well as Chinese multinational corporation, Haier Group, which launched a US$1 billion perpetual debt security.

In January last year, the MAS launched the Asian Bond Grant Scheme to encourage the issuance of bonds by first-time Asian companies in Singapore. The scheme supports up to 50 per cent of typical issuance-related expenses, subject to a cap of S$400,000 for rated issuances, and S$200,000 for unrated issuances.