MAS launches SGD Credit Rating Grant

This is to encourage issuers in the SGD bond market to issue rated bonds.

In the efforts to encourage issuers in the Singapore-dollar (SGD) bond market to issue rated bonds, the Monetary Authority of Singapore (MAS) announced the launch of an SGD Credit Rating Grant.

"Greater availability of credit ratings in the domestic bond market will help to further improve market transparency, by providing timely and independent assessments of the creditworthiness of issuers throughout the life of a bond," MAS said in a statement.

The central bank also noted that the credit ratings can benefit bond issuers as Many regular issuers in the SGD bond market are currently unrated and rely mainly on the same pool of domestic investors.

"Credit ratings will allow these issuers to attract a broader and more diverse investor base, including international institutional investors," MAS noted.

With this, MAS would like to see a higher share of rated issuances in the SGD bond market. Currently, only about half of the outstanding volume of SGD bonds are rated.

To encourage issuers to obtain ratings, the grant will, over a five-year period, help issuers offset the associated costs. Qualifying issuers of SGD bonds who obtain credit ratings from an international credit rating agency (CRA) will be able to claim up to 100% of their credit rating expenses, subject to a funding cap of $400,000 per issuer.