In Bloomberg it was reported that entering 2016, Singapore builders are facing with another wall of debt coming due, falling confidence and declining earnings.
According to Bloomberg-compiled data, a record $9.6 billion of bonds were repaid this year. There are also $6.4 billion of maturities due next year, $2.3 billion in 2017 and $7.4 billion in 2018.
According to stock exchange filings, Ley Choon Group Holdings and Swee Hong are restructuring their debt with lenders; Tat Hong Holdings is asking bondholders to ease financial covenants in its July 2018 notes.
Bloomberg classified 5 residential builders have an average debt-to-equity ratio of 48 times.
Construction emerged as one of the least optimistic industries in a quarterly survey of local firms by Singapore Commercial Credit Bureau, a credit assessment venture between Dun & Bradstreet and the Association of Small and Medium Enterprises.
Five of six industry indicators – net profit, inventory, employment, selling price and new orders – are seen shrinking in the first three months of next year.
The yield on Tat Hong’s 2018 local currency debt had risen to 6% yesterday morning, data compiled by Bloomberg shows, versus 4.5 % when it was sold in July 2013.
According to data published by the Monetary Authority of Singapore, the construction sector accounts for about 5 % of gross domestic product and grew at an annual pace of 1.6 % last quarter, slowing from 3 % in 2014 and 6.3 % in 2013.