# **Contents**

|**1.**<br>**INTRODUCTION......................................................................................................................................3**|
|---|
|**2.**<br>**LITERATURE ON THE PRIMARY MARKET FOR CORPORATE BONDS..................................6**|
|**3.**<br>**CHARACTERISTICS OF CORPORATE BONDS................................................................................7**|
|3.1<br>LACK OFLIQUIDITYATTRIBUTES........................................................................................................8|
|3.2<br>MARKETWINDOWS.............................................................................................................................8|
|3.3<br>BUY ANDHOLD.................................................................................................................................10|
|3.4<br>CREDITRISK......................................................................................................................................11|
|3.5<br>ISSUINGCOSTS..................................................................................................................................13|
|3.6<br>PRIMARYMARKETEFFICIENCY.........................................................................................................16|
|**4.**<br>**REGULATORY FOCUS ON NON-RETAIL INVESTORS................................................................17**|
|4.1<br>EXPEDITIOUSPROCEDURES...............................................................................................................17|
|4.2<br>REGULATORYFOCUS.........................................................................................................................20|
|4.3<br>DIFFERENTIATEDPROTECTION..........................................................................................................22|
|**5.**<br>**ECONOMICAL OFFERING METHODS ............................................................................................23**|
|5.1<br>TRADITIONALPRIVATEPLACEMENTS................................................................................................26|
|5.2<br>INSTITUTIONALOFFERINGS...............................................................................................................34|
|5.3<br>INTEGRATEDDISCLOSURE ANDSHELFREGISTRATION......................................................................37|
|**6.**<br>**CONCLUSION.........................................................................................................................................41**|
|**REFERENCES .........................................................................................................................................44**|
|**Tables**|
|Table 1.1: Equities, Bonds, and Bank Loans Compared to Nominal GDPs in Selected Developing and|
|Industrial Countries....................................................................................................................................... 4|
|Table 3.1: Issuing Expenses of Public Issue of Corporate Bonds ............................................................... 13|
|Table 4.1: Bond Issuance Process in the Eurobond Market for New or Infrequent Issuers........................ 19|
|Table 4.2: Bond Issuance Process in the Eurobond Market for Frequent Issuers: Book-Building Method 20|
|Table 5.1: Comparison of Offering Methods for Corporate Bonds............................................................. 24|
|Table 5.2: The Number of Investors for a Traditional Private Placement................................................... 33|
|Table 5.3: Private Placements and Public Offerings of Corporate Bonds in Singapore (1999–2002)........ 36|
|Table 5.4: Percentage of Issue Amounts of Unlisted Bonds in Issues of Nongovernment Debt Securities in<br>Singapore (2003–07) ................................................................................................................................... 36|

## **Figures**

|Figure 1.1: Offering Methods of Corporate Bonds ....................................................................................... 5|
|---|
|Figure 3.1: Continuous Competition for Market Windows in an Efficient Primary Market......................... 9|
|Figure 3.2: Liquidity Assets and Yield-Seeking Assets in an Investment Portfolio ................................... 10|
|Figure 3.3: Time Frame for Stand-Alone Public Offering in Emerging Markets ....................................... 14|
|Figure 4.1: Total Number of Weeks for Issuance, by Country and Region ................................................ 18|
|Figure 5.1: Size of Singapore Corporate Bond Market (1997–2006).......................................................... 36|
|Figure 5.2: Simplification of Documentation for Frequent Issuers............................................................. 37<br>**Boxes**|
|Box 4.1: Survey on Duration of Corporate Bond Issuance Processes......................................................... 18|
|Box 5.1: Corporate Bond Issues in Singapore............................................................................................. 36|
|Box 5.2: Bought Deal Compared with Book Building................................................................................ 38|

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