Default risks rise as Singapore struggles with $12b of maturing bonds

Distress may spread to sectors like logistics, O&G and construction.

Bloomberg reports that the firms are likely to witness a tide of rising soured debt as the trade-reliant economy takes a hit from escalating trade tensions. Excluding banks, borrowers in the Singapore dollar bond market face a record $12b (US$8.6b) in bonds that will mature next year, data from Bloomberg show.

A separate report from S&P shows that US$10b of SGD corporate bonds are set to mature by 2020 as the troubles of water treatment firm Hyflux may spell only the beginning of a series of default risk situations in Singapore.

Also read: Corporate earnings take hit as economy slows

Stress is likely to emerge in sectors such as logistics, in addition to others that have already been struggling, such as oil and gas and construction, Angela Ee, a Singapore-based partner at EY with over two decades of restructuring experience told Bloomberg.

Also read: Nearly 7 in 10 firms' EPS fell in Q2

KrisEnergy Ltd., a Singapore-listed oil and gas explorer that’s partly held by Keppel Corp. and had sought to restructure its debt in 2016, said that it will “temporarily cease repayment” on some of its financial obligations which include interest payable under its $200m bond due 2023 whilst hard-drive component maker MMI International Ltd. also missed repayments on US$580m loan.

Here's more from Bloomberg.