Retail investors can now buy wholesale bonds under new seasoning framework

Some issuers can sell bonds without a prospectus.

Individuals now have access to wholesale bonds which were once only available to institutions or accredited investors, on back of the introduction of the SGX’s bond seasoning framework.

The framework will enable allow retail investors to buy wholesale bonds in denominations as small as $1,000 six months after the bonds are listed on SGX.

These bonds will be offered by issuers which meet minimum criteria relating to their size, track record and listing history. There are currently 1,900 wholesale bonds on the local bourse, which are only available in large denominations of at least $200,000, and/or offered to institutions or accredited investors.

In addition, these eligible issuers can make subsequent direct offers of bonds, called a “re-tap”, to retail investors under the same terms as the existing wholesale bonds without a prospectus, following the six-month seasoning period. These changes follow SGX’s public consultations in September and December 2014.

In addition to the Seasoning Framework, the Monetary Authority of Singapore (MAS) also announced the Exempt Bond Issuer Framework today.

Under this framework, issuers that satisfy thresholds relating to their track record that are higher than the eligibility criteria under the Seasoning Framework can offer bonds directly to retail investors at the onset without a prospectus.