Public to be offered B38bn savings bonds
The Public Debt Management Office (PDMO) plans to reserve savings bonds worth 38 billion baht for the public in the 2015 fiscal year to expand retail investors' long-term savings options.
The bonds will be offered in three batches. Two will be three-year notes each worth 4 billion baht, while the third worth 30 billion will have a maturity of more than five years, said Suwit Rojanavanich, the office's bond market adviser.
The PDMO looks set to sell savings bonds to the public every four months and the first tranche is expected to be offered by December, he said.
Outstanding savings bonds total 159 billion baht, representing 6% of government bonds.
The Finance Ministry in July sold out savings bonds worth 30 billion baht to retail investors in less than a week. Seven-year bonds had a coupon rate of 4.25%, while 10-year bonds had a rate of 4.75%.
Mr Suwit said Finance Minister Sommai Phasee would decide whether a new benchmark century bond will be offered in the 2015 fiscal year.
If he gives the nod, the PDMO will initially test the market with the 100-year bond worth billions of baht.
He said the PDMO planned to borrow 99.7 billion baht from banks in fiscal 2015 for infrastructure development before refinancing with long-term bonds later.
Of the 99.7 billion baht to be borrowed, 45.6 billion will fund the government's eight-year investment plan through 2022 and the rest will be used for ongoing projects.
The amount is part of 381 billion baht in new borrowing by the government and state enterprises in the next fiscal year, starting Oct 1.
The National Council for Peace and Order this month approved the PDMO's borrowing plan worth 1.426 trillion baht for fiscal 2015.
The PDMO earlier estimated fiscal 2015's public debt would stand at 47.2% of GDP, down from 48.2% planned by the previous Pheu Thai-led government and well below the Finance Ministry's fiscal sustainability framework of 60%.
Public debt rose slightly to 5.662 trillion baht at the end of July from 5.655 trillion at the end of June. The public debt-to-GDP ratio as of July 31 was 46.9%.
Moreover, the PDMO is mulling a baht-denominated bond worth 1.5 billion baht to be issued by a Laotian state enterprise to refinance its debt.