HONG KONG, June 30 — The Monetary Authority of Singapore will start offering grants to offset costs incurred by issuers seeking credit ratings for Singapore dollar-denominated bonds, according to a central bank statement today.

"MAS would like to see a higher share of rated issuances in the SGD bond market,” the regulator said, referring to Singapore dollar notes. "Currently only about half of the outstanding volume of SGD bonds are rated.”

Greater availability of credit ratings in the domestic bond market would improve market transparency, according to MAS.

It added that many regular issuers in the local debt market are unrated and rely mainly on the same pool of domestic investors. 

The move comes as the Singapore bond market has suffered an unprecedented S$1.35 billion (RM4.2 billion) of defaults since November 2015 amid a slump in oil prices, with some individual investors having suffered losses.

"It may help retail investors to better assess the credit risk of the issuers,” said Annisa Lee, Hong Kong-based head of Asia ex-Japan flow credit analysis at Nomura International (Hong Kong) Ltd

Qualifying issuers who obtain credit ratings from an international rating firm will be able to claim as much as 100 per cent of their credit rating expenses, subject to a funding cap of S$400,000 per issuer. — Bloomberg