Singapore's central bank says want more rated bonds

SINGAPORE - Singapore's central bank said on Thursday it wants more bonds to be rated and would consider ways to offset the cost of ratings for existing issuers.

The comments came amid a rout in Singapore's largely unrated offshore oil and gas bonds where companies have defaulted on debt commitments after a sharp fall in global oil prices.

"About 40 percent of outstanding Singapore dollar bonds are rated, and we would like to see this share go up," said Jacqueline Loh, deputy managing director of the Monetary Authority of Singapore, in a speech.

She said the central bank would consider ways to offset the cost of obtaining a credit rating for existing issuers, while rated issuers will get a larger grant under the so-called Asian Bond Grant to be introduced next year.

But Loh cautioned investors against basing investment decisions solely on ratings.

"Regardless of whether a bond is rated or not, investors need to make their own credit assessments," she said.

Mostly high net worth investors were caught holding bonds of these unrated energy and shipping companies sold in 2013 and 2014, which then offered high yields, but were hard to sell during times of distress when commodity prices collapsed.