PDMO to raise up to $1.5 bn for rail, water projects via global bonds

“We aim to issue global bonds in fiscal year 2014,” PDMO director-general Chularat Suteethorn said. “It all depends on whether the government’s Bt2-trillion [transport infrastructure] project and the Bt350-billion water-system development will follow their investment targets.”
 

The PDMO is studying details of the proposed bond issue.
 

The office raised funds by issuing bonds overseas in 2006.
 

Chularat said the government was building up Thai government bonds in overseas market as it sought different funding channels.
 

“The government’s overseas fund mobilisation could establish the benchmark rates for the private sector,” she said.
 

In fiscal 2014 (October 2013-September 2014), the office will mobilise funds totalling Bt760 billion for projects through bank loans, amortised bonds, inflation-linked bonds and long-term government bonds.
 

The PDMO has expressed concern over rapid increases in government bonds’ yields. The office rejected all bids for its 15-year inflation-linked bonds on Wednesday because of unacceptable offers of a yield of 2.71 per cent, 1.15 percentage points above the previous month’s figure.
 

“Throughout the past year, the benchmark rate for government bonds has increased by about 1 percentage point. That boosts funding costs. The current cost for government bonds averages 4 per cent,” Chularat said.
 

In a meeting between the Finance Ministry and 14 bond-market traders yesterday, some said expectations of inflation should have been higher than announced given the high yield offered on inflation-linked bonds for the September 11 auction.
 

Of the Bt760 billion the PDMO plans to raise in fiscal 2014, Bt9 billion will be for the water-management system, but only those projects that do not impact the environment, Bt3 billion for the disaster-prevention system, Bt137 billion for infrastructure, Bt250 billion to replenish the budget deficit, and Bt360 billion to restructure its debt.