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SEMBCORP Industries Ltd's sale of Singapore-dollar bonds this month may spur other companies from the city to tap debt capital markets, according to Standard Chartered plc.
SembCorp sold $200 million of 5 per cent, five-year notes on April 8, equivalent to about two-thirds of all local-currency notes issued by Singapore companies in the first quarter, data compiled by Bloomberg show.
'They proved the appetite was there because their issue closed within the day,' said Roop Barua, head of fixed income for Standard Chartered's private and commercial bank unit in the city. 'It was good to see a good credit come into the market.'
Local-currency bond sales from Singapore companies tumbled to $329 million in the first quarter from $1.9 billion in the same period last year as the city's economy slumped, Bloomberg data show. That's almost a fifth of the HK$7.85 billion (S$1.5 billion) of local-currency bonds sold in Hong Kong and compares with 23.7 trillion won (S$27 billion) of sales in the South Korean currency during the period.
'The Koreans were quite well received, but some of them had to pay up in the Singapore market because their name recognition is not as high,' said Anurag Mahesh, Deutsche Bank AG's Singapore-based Asia-Pacific head of global investments and sales. 'So long as Singapore companies pay a little bit of new-issue premium, this market could certainly open up. SembCorp was a step in the right direction.' - Bloomberg
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