Wealthy buyers of bonds issued in Singapore have had a sharp reminder about the risks involved in accepting such paper, with new data revealing that issuers are increasingly stretched in their ability to meet their repayments.

Wealthy buyers of bonds issued in Singapore have had a sharp reminder about the risks involved in accepting such paper, with new data revealing that issuers are increasingly stretched in their ability to meet their repayments, according to Bloomberg data.

The news and information service says that three out of every 10 notes sold in 2014 are yielding more than 6 percent. The reported noted, for example, that Halcyon Agri Corp last month approached bondholders requesting them to forgo asking cover requirements before it even had to make a coupon payment.

The report said that non-investment grade firms, or “junk-rated” firms in Singapore must find the money to repay $2.1 billion ($1.57 billion) of debt during 2015, which is up from $1.7 billion in 2014 and $1.1 billion in 2013.

The stress on wealthy bondholders could be large, as the report noted that wealthy clients in Singapore have bought 86 per cent of the higher-yielding bonds last year.

Singapore has been considered one of the safest bond markets in Asia but risks have risen due to a proliferation of global bond issuance, a weakening pace of economic growth (as seen by data showing falling residential prices) and the impact of a decelerating Chinese economy.

There have been concerns for some time about the risks that investors are taking on, as seen by this article in WealthBriefingAsia here.