The proliferation of private banks has made the
Singapore-dollar debt capital markets an attractive destination
for foreign issuers. But a flurry of lower credits could be
changing its composition
Singapore-dollar bonds were previously dominated by
well-known local issuers, such as real-estate developer
CapitaLand. As a result, the market evolved differently from
the international markets, most notably including maintenance-
instead of incurrence-based covenants.
That has changed as the private bank market has deepened. The Singapore
markets are now considered a destination for credits from other
Southeast Asian jurisdictions. This may necessitate a change in
the covenant packages previously included in bond issuances
– which differed from what’s seen in the
"Singapore dollar bonds are hybrids between
investment-grade bonds and loan-type covenants," said Timothy
Hia, partner at Latham & Watkins in Singapore.
"They’re a slightly different animal," he
added, noting that they generally track investment-grade
covenants, although some elements of a...