Singapore bond market faces $22b refinancing bill

This came as Fed raised policy rates by 25bp.

According to Reuters, Singapore dollar bonds worth S$22 billion ($15.5 billion) are callable or due to mature next year, exposing issuers and investors to refinancing risks as borrowing costs rise in the US.

The US Federal Reserve last Wednesday raised policy rates by 25bp and surprised markets with guidance for three, instead of the expected two, rate increases next year. US Treasury yields immediately jumped 10bp-11bp across the curve, pulling Singapore dollar swap offer rates higher on Thursday morning. The five-year and 10-year SOR soared 10bp to 2.36 percent and 2.87 percent, respectively, from the previous day's close. Issuers that sold bonds in early 2012, for example, could be looking at an increase in five-year base rates of around 100 basis points when they come to refinance, as the benchmark rate was only 1.34 percent at the start of that year.

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