S'pore investors turn to riskier bonds

[Stephen]

http://www.valuebuddies.com/thread-3308-...#pid104374

Junk bond crisis is brewing in Singapore...

There is no doubts about it.

We haven't had junk bond crisis in Singapore ever. However, given the aggressive iintermediation by local banks as originator of corporate debts and the aggressive appetite especially amongst high net worth individuals, aka private banking clients, due to persistently low borrowing rates tied to sibor, there are so many that has leverage up to enhance yields on the corporate bonds that were targeted at them (denomination typically around S$250k and above).

Although compiling the database takes quite a bit of effort (via SGX announcements), it is quite clear that Tom, Dick, Harry, Ah Beng, Seng and Lians have made a beeline to tap the pool when the window was opened until earlier this year.

Even though we saw a rare FCL 3.65% retail tranche and the latest Aspial 5.25%, I deemed a sign that corporates no longer have easy assess to the swift placement of debt papers via the high net worth channel. Hence, they have to take the trouble to reach out to the relatively virgin retail segment.

The signs are there and the threat is real. No price for guessing but roadside sources said that there are no longer bids for several O&G highly leveraged companies with abundant series of normal debts and perpetual papers.

Hopefully, the delay in levelling the playing field between the high net worth and retail players have helped saved some innocent retail $ but for sure there are many hurt net worth individuals.

Alarmed and Worried
GG

GG got any high net worth individuals got hurt?

Any bonds of local companies of late go bust can share.