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SME D bonds sell out at 4 times offering price

Sep 09. 2019
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By The Nation

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The 2nd generation bonds of the Small and Medium Enterprise Development Bank of Thailand (SME D Bank) valued at Bt4 billion quickly sold out, reflecting investors’ confidence in the bank and its mission to grant loans to more than 60,000 Thai SME operators.

SME D Bank’s deputy general manager Phongcharn Samphaongern revealed that since the bank started offering the 2nd generation 5.8-year bonds valued at Bt4 billion on September 2, many investors have showed interest. “Their popularity has driven the buying price up to 4 times more than the offering price, or more than Bt18 billion,” he said.

Phongcharn further explained that the bonds have lowest bidding yield at 1.492 per cent, which is lower than the coupon rate of 2.15 per cent, showing that the bonds are highly sought after by investors. “The reason why investors are confident in SME D bonds is that both principle and interest are guaranteed by Minister of Finance,” he said. “Furthermore, the bank was granted AAA status by Fitch Ratings (Thailand), which is the same level as the government’s credit rating.”

So far SME D Bank has offered two generations of bonds valued at Bt11 billion, which has resulted in improved liquidity and enabled it to grant low-interest loans to SME operators via the “Local Economy Loan” campaign. “The bank should reach the target of Bt60 billion loans granted by year end,” said Phongcharn. “We expect to fund over 60,000 SMEs, effectively putting more than Bt300 billion into the economy.”

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