Singapore Faces Risk of More Oil Bond Defaults
- Swiber’s plan to operate under judicial management fuels woes
- Debt loads in industry threaten a key Singapore export sector
A worker checks a dial on the Tullow Oil Plc Prof. John Evans Atta Mills Floating Production Storage and Offloading (FPSO) vessel docked at the Sembcorp Marine Tuas shipyard in Singapore, on Thursday, Jan. 21, 2016. The FPSO will receive, process and store crude oil at Tullow's Ten Project oil development around 60 kilometers offshore Western Ghana. The explorer and producer expects its net debt to keep on rising until the Ten Project goes into production in the middle of this year before declining from that point onwards, according to Chief Executive Officer Aidan Heavey.
Photographer: Nicky Loh/BloombergSingapore bondholders and lenders, already stung by Swiber Holdings Ltd.’s woes, face mounting pain as a drop in oil leaves more companies in the industry starved for cash.
Investment bank UOB Kay Hian Pte warned last week that the sector may suffer a "cascade" of defaults. Bank of Singapore Ltd. said sustained weakness in crude prices could increase risks. Oil-related firms face S$1.4 billion ($1 billion) of Singapore dollar bonds maturing through 2018, with S$325 million due by the year end, according to Bloomberg-compiled data.