Laos to issue more baht-denominated bonds
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The Laotian Finance Ministry will at the end of the month offer its second lot of baht-denominated bonds worth Bt3 billion with maturity of three and five years, offering coupon rates ranging from 4.6-5.2 per cent per annum.
TMB Bank as the lead arranger and Bangkok Bank are co-underwriters for the bonds, which will be offered to institutional investors and major investors at both banks’ branches on November 29 and December 2-3.
The Laotian Finance Ministry in May launched its debut Bt1.5 billion of baht-denominated bonds, also arranged by TMB Bank.
Jarin Pintusopon, the bank’s head of corporate finance and debt capital markets, said the Laotian ministry had determined to issue baht-denominated bonds again after the first issue was overwhelmingly subscribed by more than 2.7 times.
The second lot of bonds has again received exemption from credit-rating requirements by Thailand’s Finance Ministry and Securities and Exchange Commission, but the bank believes the political and fiscal stability in Laos as well as its growing economy will attract investors.
The bonds will also provide an opportunity for investors who are looking for Asean bond issues and want to cash in on the upcoming Asean Economic Community.
Surabhan Purnagupta, senior vice president of Bangkok Bank, said the Bt3-billion baht-denominated bonds would be only for major and institutional investors, as the unit price is set at Bt1,000 and the minimum required investment is Bt500,000 per unit, with increases in multiples of Bt100,000.
The bonds have two tenors. The three-year bond offers an interest rate of 4.6-4.7 per cent per annum, while the five-year bond offers 5.1-5.2 per cent. The coupons will be paid every six months.
Bangkok Bank believes the bonds will receive a good welcome by investors because Laos is a high-growth economy, especially in the hydropower and mining sectors.
The Laotian Finance Ministry says it will use the funds raised from its bond issues to support its general activities and to make joint investments in infrastructure.
