STUDY OF BOND ISSUES IN SINGAPORE

Abstract

This study performs a comprehensive investigation of past bond issues and the incidence of secured debt in Singapore. It has been found that both the secured bond and the unsecured bonds are comparable in size. The average size of bonds issued by property firms is also considerably larger than bonds issued by non-property firms. On top of that, we discover that secured debt is relatively more expensive to issue than unsecured debt. The empirical results also show that the sector that the issuer is from does not influence the issuing of secured debt while the price movements of the property market turn out to be a significant factor. It also appears that a firm with high levels of leverage and return on total assets is more likely to issue secured debt. In addition to that, the probability of issuing secured debt is strongly related to the market value per net tangible assets ratio. However, the study rejects the following variables as factors that would predict the incidence of secured debt; the size of bond issue (SIZE), firm's size (FIRM) and its default risk (AGE).