Subsidies from the Monetary Authority of Singapore (MAS) drove first-time bond issuances in Singapore last year, according to findings from its Singapore Corporate Debt Market Development 2019 report.
MAS noted that there was a significant increase in debutant Asian issuers in Singapore's bond market since the Asian Bond Grant (ABG) Scheme's launch in 2017. Many of the issuers came through the ABG scheme, which has since been replaced with the Global-Asia Bond Grant Scheme.
As a result of the ABG scheme, average annual first-time issuance volume more than doubled during the scheme period of 2017 to last year, compared with the 2014 to 2016 period, MAS noted.
The ABG Scheme supports up to 50 per cent of typical bond issuance-related expenses for first-time Asian issuers in Singapore's bond market, subject to a cap of $400,000 for rated issuances and $200,000 for unrated ones.
Overall, Singapore's bond market maintained the record issuance volumes of $95 billion achieved in 2018, with Singapore dollar-denominated bond issuance registering good growth last year. The size of Singapore's total outstanding corporate bonds rose 10.2 per cent to $420 billion as at Dec 31 last year.
Out of the $233 billion in total debt issued last year, 87.7 per cent, or $204 billion, came from non-SGD debt issuances, underscoring the strong international characteristics of Singapore's corporate debt market, MAS said.
The US dollar remained the primary currency of issuance, representing 69.3 per cent of total issuance volume last year.
Singapore's debt market has continued to grow, with total debt outstanding registering 11 per cent growth year on year to reach $472 billion. This represents a compound annual growth rate of 8.5 per cent since 2015, MAS said. SGD debt outstanding reached $165 billion while non-SGD debt outstanding reached $307 billion.
Corporate issuers accounted for the majority of issuance volume at 45.6 per cent for both non-property and property corporations, including special-purpose vehicles.
THE BUSINESS TIMES