Singapore bond issuance up 108 pct to US$31.1 billion — Thomson Reuters


SINGAPORE: Primary bond offerings from Singapore-domiciled issuers witnessed a record volume of US$31.1 billion, as local companies tap both domestic and foreign bond markets to raise funds, soaring 108 per cent higher than last year, according to Thomson Reuters.

The Thomson Reuters Singapore Debt Capital Markets (DCM) 2012 Preliminary Review released yesterday revealed that total bond proceeds during the fourth quarter of 2012 totalled US$3.8 billion, a 69.8 per cent drop coming off from a record high during the third quarter of 2012 (US$12.6 billion), but saw a 49.7 per cent growth from the fourth quarter of 2011.

It said Singaporean borrowers that tapped the US-dollar bond market raised US$10.8 billion in proceeds this year, a three-fold increase compared to the previous year, making it the best annual period ever in terms of value and number of new issues.

DBS topped the Singaporean-issued bonds underwriting this year, with related proceeds of US$6.4 billion from 47 new issues, up 75 per cent from the previous year.

According to estimates from Thomson Reuters/ Freeman Consulting Co, DBS booked an estimated US$19.3 million in fee revenues, a 41.5 per cent increase from last year, and accounted for 19.8 per cent of Singapore’s bond fee pool.

Underwriting fees from bond issuance by Singaporean companies grew 87 per cent to US$97.3 billion over the same period in 2011.

Driven by bond issuance from banks, total proceeds from the Financials sector grew 164 per cent to US$16.3 billion compared to last year.

Financials represented 52.3 per cent of the total proceeds raised by Singaporean borrowers, where OCBC Bank, DBS Bank and United Overseas Bank captured a combined market share of 28 per cent with a total of US$8.7 billion in proceeds (including issuance from subsidiaries), a 249 per cent growth from 2011.

Meanwhile, corporate bond issuance (excluding Financials) raised total proceeds worth US$11.5 billion, up 106 per cent compared to last year, capturing 37 per cent of the market share.

Consumer Staples, Energy & Power and Telecommunications all saw triple-digit percentage increase from the previous year.

The Singapore-dollar bond market witnessed issuance at a record pace as borrowers tapped the nation’s local currency debt market with 120 primary bond offerings worth S$29.8 billion (US$23.9 billion) so far this year, a 53 per cent increase compared with the previous year.

Total proceeds raised during the fourth quarter of 2012 totalled S$4.2 billion (US$3.4 billion), a 62 per cent sequential decline after the third quarter volume in 2012 reached an all-time high, but saw a 14.6 per cent growth from the fourth quarter of 2011.

The start of 2012 saw a stream of perpetual bonds with Genting Singapore offering the largest-ever single-tranche issued in Singapore’s local currency market worth S$1.8 billion (US$1.4 billion), followed by a second issue worth S$500 million.

Perpetual bonds registered 20 per cent of all Singapore dollar-denominated bonds sold this year worth S$6 billion (US$4.7 billion).

Meanwhile, Asia Pacific’s collective local currency bond volume amounted to US$550.1 billion, where Singapore dollar bond sales accounted for 4.3 per cent, gaining 1.5 market share points from last year.

Southeast Asia’s aggregate local currency bond market saw 429 new issues worth US$74.3 billion in proceeds, the highest annual period for Southeast Asia local currency bonds, with 32.1 per cent captured by Singapore-dollar bonds.

Commenting on the report, Elaine Tan, senior analyst at Thomson Reuters Deals Intelligence Asia Pacific, said: “The closing quarter of 2012 may have slowed as borrowers’ paused offerings ahead of year-end holidays.

“Even so, this year was a stellar period for Singapore as both local and foreign issuers tapped the Singapore-dollar bond market generating a record volume of S$29.9 billion, up 53 per cent from the previous year.” — Bernama