LAOS has issued Bt14 billion in bonds in the Thai capital market in a placement that closes today, said Adisorn Singhsacha, founder and managing director of Twin Pine Group Co Ltd, a financial adviser on the deal.
The issuance, by the Lao Finance Ministry, marks the seventh time that the country has tapped the Thai capital market with a bond issue aimed at supporting investment in infrastructure projects.
Adisorn said the Lao government had been raising funds with bond issues in Thailand since 2013. Total issuance stands at Bt46.59 billion.
Bookings for the latest issuance opened under private placement on September 28. The underwriters are Bangkok Bank, Siam Commercial Bank and Thanachart Bank.
The Bt14 billion issue is divided into offerings with terms of three, five, seven, 10, 12 and 15 years. The interest rates range from 3.65 per cent to 6.05 per cent, depending on the term of the bond.
Adisorn said that Bt1.8 billion of the bond proceeds would be used to pay back Laos’ existing bond, which expire this year, while Bt5 billion would be used pay back loans. The remaining Bt7.2 billion would be spent on developing the country's infrastructure, such as roads and water systems.
“Thailand has the potential to be a financial hub to serve the investment needs of the CLMV countries (Cambodia, Laos, Myanmar and Vietnam) because Thailand has enough liquidity to support the region’s growth," he said.
He said it was not only Laos that could benefit from raising funds from the Thai capital market. The governments of Myanmar and Cambodia also needed to raise funds to help develop their infrastructure projects, and the Thai market could meet those needs.
“We are studying the opportunities for the Myanmar government to raise funds in Thailand to supports its infrastructure programme. A deal may be finalised next year," he said.
Adisorn said companies in Laos, Myanmar, Cambodia and Vietnam were also interested in raising funds in Thailand, as the country has sufficient financial liquidity to support their requirements.
Such interactions formed part of the collaboration between Thailand and the CLMV countries aimed at driving growth in the regional economy over the long term, Adisorn said.