Despite high interest rates, the total outstanding debt arranged by financial institutions in Singapore registered a 10.5% y-o-y increase to $566 billion last year, driven by financing needs from multinational enterprises (MNEs) in Singapore.
According to the annual corporate debt market survey by the Monetary Authority of Singapore (MAS), new issuances rose 21% y-o-y to $230 billion in 2023. Singapore dollar-denominated bonds and US dollar-denominated bonds remained the main currencies for issuances.
In 2023, financial institutions issued an additional $13 billion bonds y-o-y, with a corresponding 31.8 percentage point (ppt) increase in the proportion of Singapore dollar issuances by financial institutions compared to 2022.
MAS attributes this in part to local banks’ increased interest and capacity amid stronger earnings from their lending businesses. This, together with issuance from corporations, offset the $7.4 billion y-o-y decline in statutory board issuance.
Non-Singapore dollar bond issuance volume grew $64 billion y-o-y, and the share of non-Singapore dollar bond issuances rose 31 ppts to 41.8%.
MAS says this was driven by an increase in issuance volumes from global corporations based in Singapore. For example, Pfizer Investment Enterprises announced a $31 billion multi-tranche issue in the first half of 2023.
“Financial institutions continued to tap into our multi currency bond market and raised funding in various currencies such as US dollar, Australian dollar, pound sterling, Hong Kong dollar and euro, to support their business needs,” says MAS.
Between 2004 and 2023, issuance volumes in Singapore’s foreign currency bond market grew at a CAGR of about 10%, higher than the global bond market’s growth of 1%.
MAS attributes its strength as a fundraising centre to its full accessibility to the bond market to all issuers and investors, strong investor demand from asset and fund managers in Singapore, and the well-developed ecosystem of key debt capital market teams and professional service providers in Singapore.
See also: US bond market halts brutal run as buyers pounce on 4.5% yields
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- S'pore's net AUM inflows falls to $193 bil in 2023, but AUM grows to $5.4 tril
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