Singapore poised to become a hub for junk bonds

High-yield issuance hit record in 2013.

According to Reuters, companies in Southeast Asia are looking at Singapore as a viable alternative for high-yield bond issues in amounts that would be too small for dollar investors.

The push comes as so-called junk bonds became a predominant theme this year in the Singapore market, with a record number of small-cap and sub-investment grade companies selling debt in the Lion City, attracting investor interest by offering juicy coupons.

Data from Thomson Reuters showed that close to S$5bn (US$4.02bn) of high-yield deals were done to date this year, compared with an estimated S$4.4bn and S$3bn in 2012 and 2011. Many of these deals were for amounts smaller than US$100m, too small for the dollar market.

Read full report here.

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