Record $96b in long-term corporate debt issued here last year

About $210 billion, or about 88.9 per cent, of the total debt issuance was non-SGD denominated. This underscores "the strong international characteristics of Singapore's corporate debt market", the Monetary Authority of Singapore reported.
About $210 billion, or about 88.9 per cent, of the total debt issuance was non-SGD denominated. This underscores "the strong international characteristics of Singapore's corporate debt market", the Monetary Authority of Singapore reported. PHOTO: ST FILE

A record volume of $96 billion in long-term corporate debt was issued in Singapore last year, up 7.8 per cent from the previous year.

This growth was driven by non-Singdollar denominated long-term corporate debt securities, as Asian issuers sought to raise capital to finance growth, the Monetary Authority of Singapore (MAS) noted.

Long-term debt is defined as having a tenure of more than a year.

Total corporate debt issued fell 9 per cent to $236 billion last year, mainly due to a $31 billion fall in non-SGD short-term debt issuances, notably commercial paper.

About $210 billion, or about 88.9 per cent, of the total debt issuance was non-SGD denominated. This underscores "the strong international characteristics of Singapore's corporate debt market", the MAS reported last Friday.

Overall, Singapore's debt market continued to grow, with total debt outstanding up 10 per cent year on year to $424 billion - a compounded annual growth rate of 8.3 per cent since 2014.

Non-SGD debt outstanding last year stood at $271 billion.

The MAS has identified green, social and sustainability bonds as a growth area.

"Singapore can serve the growing need for the financing of investments to support Asia's transition towards a low-carbon and climate-resilient model," it said.

"There is growing recognition within the region of the potential of capital-market solutions."

The MAS has included social and sustainability bonds in its Green Bond Grant Scheme, now called the Sustainable Bond Grant Scheme.

Under the scheme, issuers of green, social and sustainability bonds that obtain an external review can fully offset their external review expenses, subject to a funding cap of $100,000 per issuance.

Social and sustainability bonds have a "distinct yet complementary role to green bonds", with sustainability bonds delivering social and environmental benefits, said the MAS.

Singapore's green bond market stands at over $6 billion.

Local issuers include City Developments and DBS Bank, while foreign issuers include Canadian insurer Manulife Financial Corporation and the Indian Renewable Energy Development Agency.

A version of this article appeared in the print edition of The Straits Times on October 14, 2019, with the headline 'Record $96b in long-term corporate debt issued here last year'. Print Edition | Subscribe