Govt to sell baht bonds this week
Govt to sell baht bonds this week
The government will launch its 3 billion baht denominated bond sale this week as a measure to seek capital to finance infrastructure development in the country.
Thai TMB Bank and Bangkok Bank, which have been appointed to sell the bonds to large and institutional investors in Thailand will begin sales of the unrated three-billion-baht bond on November 29, December 2 and December 3.
The bonds will mature in either three or five years, according to Bangkok Post. Interest on the bonds will be paid every six months, which carry a coupon rate of 4.60-4.70 percent per annum for three-year maturity and 5.10-5.20 percent for five-year maturity.
The government will use the money to finance construction of infrastructure in the country as one of the measures to accelerate development in the land locked country so as it can graduate from a UN list of least developed nations by 2020.
Observers said that the government's decision sell the bonds forms part of its efforts to inject money into the economy to stimulate economic growth. The government plans to achieve GDP growth of eight percent annually from 2011 to 2015.
They also said that the bond sale would help the government to address the budget deficit amid rising expenditure demand.
The government decided to raise the budget deficit from 5 percent of GDP to 6.07 percent of GDP in 2012/2013 fiscal year but expects to lower the budget deficit to 5 percent of GDP this fiscal year
Jarin Pintusopon, executive vice president of TMB Bank told the Bangkok Post that his bank sold the first lot of Lao government bonds worth 1.5 billion baht in May.
He said the success of the sale far exceeded expectations, with more than double the number of investors applying than the available bonds.
Mr Jarin said the new lot will offer an alternative investment option for Thai investors that want high returns and are seeking to diversify their risks.
It is the first time that Laos has offered five-year bonds in Thailand. Its government wants long-term funding for infrastructure investment and developing its hydropower and mining in the country.
Analysis shows that Laos still has potential to borrow foreign investment funds as the country is enjoying strong economic growth thanks to investment in electricity generation.
A number of power plants including a 1,800 MW power plant will be completed and begin commercial operation within the next few years.
The Lao government has also begun construction of hydropower plants including dams on the Mekong and its tributaries, which will generate hundreds of millions of dollars a year for the government coffers.
vientiane times
