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Stress levels in Singapore’s corporate bond market rising as coronavirus takes its toll
- Nearly US$12 billion worth of bonds are set to mature in a deepening recession from now through next year
- With the coronavirus leaving many businesses struggling just to stay afloat, retail bondholders could be at risk of losing their investments
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It is not uncommon for investors to take up arms against a company that is unable to repay its debts.
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Yet when Singapore-listed developer Hatten Land asked its investors for leniency on US$25 million worth of bonds that came due this year, it obtained their generous approval to defer repayment – not just once, but three times.
The 8 per cent guaranteed bonds were supposed to mature on March 8. Hatten Land bondholders first pushed back the repayment date to June, before moving it to July, and now August. They have agreed to extend the maturity date of the bonds on a monthly basis until June 8 next year.
For Hatten Land, which has been flogged by the slump in tourism and consumer sales, the pause on bond repayments means more time to deal with the fallout of the Covid-19 pandemic. It has been one of the lucky ones so far.
With at least S$16.1 billion (US$11.7 billion) worth of bonds set to mature in a deepening recession from now through next year, more financial distress and soured debt may be on the cards, market watchers say.
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