Bond issuance to reach B1tn Bangkok PostBond issuance to reach B1tn Bangkok PostBond issuance to reach B1tn Bangkok Post
Impact Investing Forum 2022
London. Dec 07-08, 2022.
According to the Thai Bond Market Association, the annual issuance of long-term corporate bonds will likely exceed 1 trillion baht. This is because the private sector seeks to increase its business and liquidity. Businesses in energy, finance and leasing, property and commerce are expected to be the top issuers this year, said the group.Tada Phutthitada, president of the TBMA, said the value of long-term debentures issuance in 2021 rose 50% from the previous year and exceeded 1.03 trillion baht for the second time in three years, attributed to increases in both investment grade and high-yield bonds.Among emerging themes for debentures, sustainability-linked bonds (SLBs) and environmental, social and governance (ESG) bonds are new products gaining popularity as more companies strive to make their businesses more sustainable.In the past year, there were two issuers of SLBs: Thai Union Group issued a total of 11 billion baht of SLBs and Indorama Ventures issued SLBs worth 10 billion.Meanwhile, the value of ESG bond issuance in 2021 stood at 153 billion baht, up 77% from 2020, while the total outstanding value of ESG bonds more than doubled from the previous year. Mr. Tada said that this indicates a higher level of ESG awareness among investors and issuers. The Thai Overnight Repurchase rate (THOR), a debt instrument designed to replace the Thai Baht Inflation Rate Fixing mark, was issued last year by the Bank of Thailand and five private companies. The total outstanding value of this product was 307 billion baht at 2021’s end. This is a debt instrument that was created to replace the Thai Baht Interest Rate Fixing mark. It rose by 27 basis points (bps), from 0.39% at 2020 to 0.66% at 2023. The five-year bond yield increased by 68 bps, from 0.61% a 1.29%, and the 10-year bond yield rose 61 bps to 1.28% a 1.90%. The 2-year bond will rise by 10 bps, to 0.75% at 2022. The 5- and 10-year bonds will rise by around 10 bps, 50-60 bps, to 1.7-1.8%, and 2.3-2.5%, respectively.