Tuesday, May 22, 2018

Singapore bond issuers urged to take up insurance

A new insurance scheme seeking to help bond investors is being pushed in Singapore amid cases of local bond defaults by offshore and marine-services firms.

The proposal, pitched by the Securities Investors’ Association of Singapore (SIAS) and law firm Rajah & Tann, urges bond issuers to take up an insurance policy at the time they issue bonds.

Such policies would enable aggrieved investors to be protected if there is a default, by paying the costs of calling for meetings and legal and financial advisory fees that can go as high as S$500,000 (US$372,000). At this time, such fees are shouldered by bondholders.

The proposal is now awaiting action from the Monetary Authority of Singapore.

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