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RPT-Private bank clients may lose big amid Singapore's oil and gas credit woes


(Repeats story published late Friday with no changes to text)

* Singapore private bank clients are major holders of corp

* Oil and gas service firms have aggressively tapped bond

* Swiber failure highlights risk of these investments

By Saeed Azhar and Aradhana Aravindan

SINGAPORE, July 29 Clients at Singapore’s
private banks are likely to feel much pain from credit woes in
the oil and gas sector after snapping up high-yield bonds in
recent years, bankers say – a risk highlighted by the failure
of oilfield services firm Swiber Holdings.

Oil and gas services firms have aggressively tapped the
local bond market, particularly in 2013 and 2014, but a
subsequent collapse in oil prices, tumbling charter rates and
delays to projects has sent the industry reeling.

In addition to Swiber’s announcement on Thursday that it had
filed for liquidation facing hundreds of millions in debt,
smaller firm, Technics Oil & Gas Ltd was placed under
judicial management this month.

A number of firms have also sought bondholder consent to
relax covenants such as those relating to waivers for potential
non-compliance, banking sources said, adding that investors have
had a hard time reducing their exposure.

“It has been sort of a double whammy for private wealth
investors,” Todd Schubert, managing director, fixed income
research at Bank of Singapore, OCBC’s private banking arm.

“In the first place, the financial position of some of the
companies deteriorated…

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