Laos approves bonds of nearly $400M for trade on national bourse
Laos approves bonds of nearly $400M for trade on national bourse
The Lao government has announced that additional bonds worth 3.2 trillion kip ($346 million) and $50 million will be available for trade on the Lao Securities Exchange (LSX) through the co-arrangers Lanexang Securities Public Company, BCEL-KT Securities Co Ltd, and Lao-China Securities Co Ltd.
A news conference on the offering of the bonds took place at the LSX in Vientiane on November 13. Present at the event were Ministry of Finance’s External Finance and Debt Management Department director-general Soulivath Souvannachoumkham; Lao Securities Commission Office (LSCO) director-general Saysamone Chanthachack; LSX CEO Oth Phonhxiengdy; directors of co-arrangers; shareholder representatives and company staff.
The press conference informed investors and members of the public about the newly-issued bonds for trade in the year 2020-2021, with the yearly interest rates detailed below. Bonds worth 1.7 trillion kip out of 3.2 trillion kip are in the form of a Treasury bill and will have a one-year tenor and an interest rate of five per cent per annum.
A total of 1.5 trillion kip is classified as a Budget Balancing Bonds with a three-year tenor at 6.8 per cent interest.
A five-year tenor will yield an interest rate of 6.95 per cent, a seven-year tenor 7.20 per cent, a 10-year tenor 7.5 per cent, a 15-year tenor 7.70 per cent, and a 20-year tenor will yield eight per cent interest per annum.
For budget balancing bonds in US dollars worth $50 million, a one-year tenor will offer an interest rate of five per cent per annum, a two-year tenor will give an interest rate of 5.5 per cent, a three-year tenor will be offered at six per cent, a five-year tenor will yield seven per cent, a seven-year tenor will offer 7.50 per cent, and a 10-year tenor will be offered at eight per cent interest.
Speaking at the news conference, Soulivath said trade of bonds worth 3.2 trillion kip included 1.5 trillion kip for budget balancing bonds, Treasury bills worth 1.7 trillion kip, and budget balancing bonds in US dollars worth $50 million.
“Regarding past achievements in trade in collaboration with the LSX, LSCO and the three spearheading companies, all parties have done great job in dealing with the repayment of capital and interest in the time planned,” he said.
The ministry assures investors that the payment of capital and interest will be managed in a timely manner as the previous implementation of payments in recent batches is significantly outstanding, Soulivath added.
As a result, the government has approved a third batch of bonds worth 3.2 trillion kip and $50 million for trade on the LSX each month since September until they are all sold.
Lanexang Securities Public Company CEO Anoukone Southammavong said investors can buy the bonds from his company, BCEL-KT Securities and Lao-China Securities, and its three agents – the Lao Development Bank, Banque pour le Commerce Exterieur Lao Public (BCEL) and the Agricultural Promotion Bank.
“Soon, we will partner with more banks to make it easier for investors to trade in bonds,” he said.
The ministry, acting on behalf of the government, together with Lanexang Securities, BCEL-KT Securities and Lao-China Securities are the co-arrangers and will manage the trade of bonds to build the capital market in Laos.
