Perpetual Bond Singapore
A perpetual bond (or “perp”) is a fixed-income security with no maturity date that pays a coupon indefinitely. Singapore banks and corporates issue perpetual securities to raise equity-like capital while maintaining coupon tax deductibility.
Perpetual bonds are a fixture of Singapore’s corporate bond market. DBS, OCBC, UOB, and large corporates like Sembcorp and Keppel have all issued perps on the Singapore Exchange. They appeal to income investors seeking higher yields than standard bonds — but they come with unique risks that every Singapore investor should understand before buying. This is not financial advice.
How Perpetual Bonds Work
A perp pays a fixed coupon (e.g. 4.00% p.a.) on the face value (typically S$250,000 for institutional; S$1,000 for retail) with no fixed maturity date. The issuer has the option (but not obligation) to redeem (call) the bond at specific call dates — usually 5 years after issuance, then annually. If not called, the coupon may reset to a higher rate (a “step-up” feature) to incentivise the issuer to call. For example, a DBS perp might pay 3.80% for 5 years, then step up to the prevailing 5-year SGS rate + 2% if not called. Issuers almost always call on the first call date to avoid the higher cost — but they are not legally obligated to.
Who Issues Perpetual Bonds in Singapore?
In Singapore, the major issuers are: Banks — DBS, OCBC, UOB issue AT1 (Additional Tier 1) perpetual securities to meet MAS capital requirements under Basel III. These carry a bail-in risk (can be written down if the bank faces a crisis). REITs and property companies — issue perps to raise quasi-equity capital without formal dilution. Large corporates — Sembcorp Industries, Keppel Corporation, SP Group have issued SGD perps. Retail-accessible perps (minimum S$1,000) are occasionally listed on SGX but are less common than institutional perps (S$250,000 minimum).
Perpetual Bond Risks
Key risks: No maturity — unlike a regular bond, you have no guaranteed date when you get your principal back. If the issuer doesn’t call, you hold indefinitely; Coupon deferral — non-bank perps often allow the issuer to defer coupons (sometimes cumulatively, sometimes not) without triggering default; Extension risk — if SGS rates rise sharply, the step-up may still leave the coupon below market rate, and the issuer might not call; Subordination — perps rank below senior bonds in liquidation; Duration risk — because there’s no maturity, perps behave like very long-duration bonds and are highly sensitive to interest rate changes. Compare with Singapore Savings Bonds for a government-backed alternative.
Perpetual Bond Yields vs Other Singapore Fixed Income
As at Q1 2026, typical SGD perpetual bond yields: Bank AT1 perps: 4.5–6.0%; Corporate perps (investment grade): 3.8–5.0%; SGS T-bills (6-month): ~3.0–3.5%; SSBs: ~2.8–3.2% (10-year average). The yield premium over T-bills compensates for the additional risks above. Whether this premium is sufficient depends on your risk appetite. For conservative investors, T-bills and SSBs offer government-backed returns with liquidity.
How to Buy Perpetual Bonds in Singapore
Retail investors can access SGD perps via: SGX secondary market — listed retail perps can be bought through standard brokerage accounts (POEMS, DBS Vickers, moomoo); Bond funds — some unit trusts and ETFs hold corporate perps as part of a diversified fixed income portfolio; Robo advisors — Endowus offers fixed income fund options that may include perpetual securities. Institutional perps (S$250,000 minimum) are typically accessed via private banking or wealth management platforms. Check SGX’s bond portal for listed SGD bonds and their terms.