Understanding Singapore’s Bond Market
SGD Corporate Debt Market
The growing Singapore dollar corporate debt market features a wide range of instruments from both domestic and foreign issuers.
The Singapore dollar (SGD) corporate debt market has grown significantly in the last decade. Total outstanding SGD debt reached S$150 billion as at end 2017.
The market consists of a wide range of instruments as well as issuers from across the credit spectrum. The tenors of corporate debt issued vary from 1 to 40 years and include perpetual bonds; the majority have maturities of between 5 and 10 years.
Types of Corporate Debt
Corporate debt in Singapore includes the following:
- Corporate debentures make up the largest segment of corporate debt. They are negotiable, unsecured debt securities issued by corporations, financial institutions, supranationals, government agencies and statutory boards.
- Hybrid securities have both debt and equity features, and can be in the form of preferred stock, perpetuals, convertible bonds, and others.
- Medium-term notes are securities that typically mature in 5 to 10 years. Frequent issuers of medium-term notes can set up a programme to issue them continuously on a best effort rather than an underwritten basis, to meet investors’ demand as it emerges.
- Securitised debt securities include asset-backed securities and commercial mortgaged-backed securities, which stem from the real estate investment trust market.
Types of Issuers
The diversified issuer base for SGD corporate debt includes statutory boards, corporations and financial institutions. A significant proportion are foreign issuers.
Domestic issuers include the following:
- Statutory boards, which are quasi-governmental agencies with autonomy and flexibility to perform government functions. Issuers include the Housing Development Board, Land Transport Authority and Public Utilities Board.
- Corporations and financial institutions, including property related corporations, other corporations and banks.
Singapore is one of the most international bond markets in Asia, with foreign issuers making up 25% to 30% of total annual issuance volumes for SGD corporate debt.
The issuers include supranational agencies, corporations, and financial institutions. They are mainly from Europe and Asia, with an increasing diversity of issuers from other regions.