Photo of MAS from Reuters Edgar Su

According to a report by Reuters, the Singapore economy could be in danger of default if its bond market do not secure the S$22 billion refinancing by 2017.

The government Housing Development Board (HDB) alone accounts for S$3.4 billion of the maturing bonds. It is unknown if the Singapore government have other debt obligation but the country has apparently managed to raised S$4.5 billion from bond sales in 2016. While the Reuters article expressed optimism that the triple-A rated Singapore government can meet its debt obligations, the same could not be said for the private sector.

However since Nov 2015, the Singapore bond market saw a total of 5 defaults amounting to S$1.1 billion. The news of bond default is the first in 7 years since the 2009 Global Financial Crisis. In response to bond defaults, Singapore bond issuers are trying to convince bond holders to consider debt-restructuring plans – a delay method that is likely to plunge a company into deeper debt as underlying business performance remains weak.

The Monetary Authority Singapore (MAS) acknowledged in their public statement last month that “bond defaults can happen” in Singapore and that the government cannot enact laws to prevent a default.

You may read the original Reuters article here.