Singapore bond buyers turn wary of those sold by smaller firms

SINGAPORE (July 12): Singapore’s smaller companies will likely have to pay more to roll over borrowings in the local bond market ahead of unprecedented maturities, as the wealthy investors who constitute a key buyer base get cold feet.

Recent defaults along with rising borrowing costs for private banking investors have hurt demand, according to Eastspring Investments portfolio manager Danny Tan, who helps manage the Singapore Select Bond Fund. The fund had $854 million of assets under management as of May 31.

Fresh signs have emerged of stress among smaller borrowers in the local debt market this year. CW Group Holdings, a precision machine tool maker, defaulted on a bond in June. Hyflux, a water treatment and power firm, is pursuing a debt restructuring after defaulting on its perpetual securities.

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