On 29 September 2021, TSMP Law Corporation partner June Ho was quoted in a Business Times article on increased market activity for investment grade Singapore Dollar perpetual bonds.

And the environment has become more favourable for perp issues. June called it an “opportune time” to lock in funding before rates start to rise.

She said “Given the dearth of other ‘safe’ investment opportunities in the still uncertain endemic times, perpetual bonds are attractive as they afford investors a predictable and reliable stream of income, usually at higher interest rates than regular bonds.”

Perp holders are also at some disadvantage when a company winds up, as perps are subordinated to senior debt and are not secured. Perp holders are only paid after the senior debts and secured bondholders have been repaid. She added that this often leaves “not much more in the pot for the perp holders”.

June is anticipating more perp issuances from the real estate sector.

She said “With the real estate segment in Singapore reporting strong growth, one would expect fundraising activity in that sector to boom,” She added that there has been a lot of action among the Reits despite challenging conditions in the sector as a result of Covid-19 pessimism surrounding the commercial and retail space.