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More options, but strict rules will limit number of bond issuers

Published on Sep 3, 2014 7:29 AM

Local banks have said new proposals to make it easier to sell bonds to retail investors are welcome as there is pent-up demand for this investment option.

But the menu for the expected buffet of bonds could be limited, given the high benchmark being proposed for bond issuers.

On Monday, financial regulators, the Monetary Authority of Singapore and the Singapore Exchange (SGX), unveiled the proposals to make it easier for retail investors to buy bonds.

A key change would allow eligible firms eyeing retail clients to do away with the onerous need to issue prospectuses for basic bond offers.

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Background story

The seasoned debt issue must also have an initial minimum principal amount of $300 million. Based on just the minimum $300 million criterion, only 17 of the 102 bonds issued this year as at Aug 25 would be able to hit the benchmark.