Singapore’s millionaires feast on Chinese bond sales worth $380m

Almost double that of 2013.

Singapore’s bond market is getting a boost from Chinese borrowers tapping the island’s millionaires for record amounts at rates almost 30 percent cheaper than home.

A report by Bloomberg reveals that private investors in Singapore took almost all of the S$380 million ($299 million) of local dollar-denominated notes sold by mainland Chinese companies excluding banks last month, according to people familiar with the matter.

Offerings in the currency by all Chinese borrowers rose to S$1.7 billion this year, almost double such sales for the whole of 2013, according to data compiled by Bloomberg.

China’s issuers are increasingly targeting Singapore’s surging millionaire base to raise funds amid record borrowing costs at home. Debut issues from offshore companies rose to 10 in 2014 compared with none five years ago, supporting a market that makes up just 20 percent of bond sales in the Asean region compared with about 32 percent each for Thailand and Malaysia.

“The future growth of Singapore’s bond market is dependent on making itself relevant to offshore issuers and investors, over and above the domestic market,” Clifford Lee, Singapore-based head of fixed income at DBS Group Holdings Ltd., the island’s top bond arranger, said in an interview. 

View the full report here.