January 2, 2020 / 3:26 AM / 3 months ago

Singapore bourse seeks tighter norms on retail bonds after Hyflux's collapse

SINGAPORE, Jan 2 (Reuters) - Singapore Exchange Ltd’s (SGX) regulatory unit is looking into imposing stricter regulations for listed retail bonds, including tightening the admission criteria, a move that follows a high profile default by water treatment company Hyflux.

In a statement on Thursday, Singapore Exchange Regulation (SGX RegCo) said it had set up a working group comprising representatives from law firms, banks and an investor group to review the retail bonds regulatory framework.

“The possibility of tightening the admission criteria including requiring a minimum level of subscription by institutional investors and a credit rating are among matters to be discussed,” said Michael Tang, head of listing policy and product admission at SGX RegCo.

The working group is expected to give its recommendations to SGX RegCo by mid-2020, following which a public consultation is likely to take place by the year-end, SGX RegCo said.

Debt-laden water treatment firm Hyflux, once seen as a national champion running a strategically important water resource for Singapore, filed for a court-supervised financial restructuring in May 2018, and defaulted on its debt payments.

Hyflux’s financial distress has battered the holdings of nearly 50,000 retail investors including shareholders and bond holders, according to an investor body.

In November, Hyflux entered into a restructuring deal with United Arab Emirates-based utility Utico FZC. (Reporting by Anshuman Daga; Editing by Kim Coghill)

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