March 25, 2014 00:00 By Suphannee Pootpisut
Hundreds of billions of baht eyed as demand surges amid downtrend in rates
The Public Debt Management Office is scheduled to raise hundreds of billions of baht through the bond market from April-June, while the market continues to demand investments amid the interest-rate downtrend.
Suwit Rojanavanich, an adviser to the PDMO, said yesterday that five state enterprises would issue bonds worth about Bt20 billion next quarter to roll over debt. They are the Expressway Authority of Thailand, Provincial Electricity Authority, State Railway of Thailand, Bangkok Mass Transit Authority and Government Housing Bank.
The Finance Ministry will guarantee only the SRT and BMTA bonds.
The PDMO also plans to sell savings bonds worth up to Bt50 billion to refinance matured savings bonds worth about Bt80 billion. The remaining amount may be totally repaid. The PDMO plans to use a variety of financial instruments of different maturities, including financial negotiable notes, promissory notes, 3- to 5-year short-term bonds and 50-year bonds.
Each state enterprise that plans fund mobilisation with or without a Finance Ministry guarantee reflects investor demand for higher returns while the policy rate stays at a low level.
“Although capital mobilisation for the rice-pledging scheme failed, the PDMO plans to issue bonds consistently. This will be in line with public debt management this year. Our plan is to issue financial negotiable notes of about Bt15 billion-Bt20 billion every week throughout the three months to promote the bond market,” he said.
Farmers may have to sell rice to mills at below cost. However, the Bank for Agriculture and Agricultural Cooperatives will prepare relief measures for customers who cannot make debt payments, such as extensions of the debt repayment schedule, postponement of interest payments and debt-restructuring.
“BAAC officials have started talking about over 10 million tonnes of off-season rice that will come out after the Songkran festival. There is no rice-pledging scheme now and farmers may have to sell rice to rice mills at low prices while farmers have no bargaining power,” said a source who asked not to be named.