Singapore-based issuers' bond offerings hit 3-year low

Bond offerings crashed by 21.5% to US$6.7b as local firms also tapped into offshore bond markets.

Primary bond offerings from Singapore-based issuers crashed by 21.5% to US$6.7b so far in 2018, as local companies tapped both domestic and offshore bond markets to raise funds, Thomson Reuters revealed. This is the slowest start to a year for Singapore bond offerings in terms of proceeds since 2015 (US$6.1b).

According to preliminary data, US$-denominated bonds issued by Singaporean companies fell 42.1% to US$1.2b.

Land Transport Authority issued a jumbo $1.2b (US$914.3m) bond offering in March, the biggest bond issuance from a Singapore company so far in 2018. “Meanwhile, UOB is currently the most active issuer in terms of bond proceeds, capturing 16.1% market share worth US$1.1b (including issuance from subsidiaries) from two primary issuance,” Thomson Reuters said.

DBS Group Holdings currently leads the Singapore-issued bonds underwriting with related proceeds of US$1.4b and accounts for 20.7% of the market share. UOB and HSBC Holdings rounded out the top three with 12.5% and 10.1% market share, respectively. DBS Group booked an estimated US$6.9m in fee revenues and accounted for 13.7% of Singapore’s bond fee pool. Underwriting fees from Singapore bond issuance totalled US$50.2m, a 55.9% increase from the first quarter of 2017.

Thomson Reuters noted that Singaporean companies from the Financials sector tapped the bond markets and raised US$4.3b, a 28.8% decline in proceeds. “Financials captured 63.9% of the total bond proceeds issued by Singapore borrowers. Government-issued bonds witnessed a significant increase in proceeds, raising US$1.8b so far compared to US$634.2m issued from the first quarter last year. Real Estate raised US$ 354.8m, down 61.7% from first quarter of 2017 and accounted for 5.3% market share,” it added.

Singapore-dollar (SGD) bond offerings also dipped 4.3% to $4.8b (US$3.6b) as the number of primary issuance declined 23.8%. Foreign issuers tapping the Singapore-dollar bond market raised $975.0m (US$740.1m) thus far, a 1.4% increase in proceeds from last year, despite a lower number of primary issuance.

Thomson Reuters also noted that government-issued bonds accounted for 48.5% of the SGD bond offerings and raised $2.3b (US$1.8b), up 157.2%. Financials accounted for 23% market share with $1.1b (US$832.2m) worth of proceeds, a 65.7% decline.

LTA’s $1.2b bond offering is the biggest SGD bond so far. State-owned Housing and Development Board (HDB) continued to tap the local bond market with two primary offerings worth a cumulative total of $1.1b (US$844.8m) in proceeds.