Thailands inaugural SOEs Bond e-Bidding : BAAC as a Pilot project

Stocks and Financial Services Press Releases Tuesday February 7, 2017 11:17
Bangkok--7 Feb--Ministry of Finance

Mr. Suwit Rojanavanich, Director General of the Public Debt Management Office, announced that the Ministry of Finance, Bank of Agriculture and Agricultural Cooperatives (BAAC) and the Bank of Thailand (BOT) will launch the SOEs electronic bidding (e-Bidding) platform as part of SOEs funding strategies 2020. The three parties have signed a Memorandum of Agreement (MOU) that will become effective as of February 14, 2017.

The Government Guaranteed Loan Bond (GGLB) of BAAC was selected as pilot project due to its market recognition and liquidity in the secondary market. Based on budgeted cashflows on debt service, the credit risks associated with GGLB are nearly identical to the government bond (Loan Bond : LB). The Ministry of Finance has endorsed the inaugural SOEs e-Bidding in February and March 2017, with the details as follows.

Table : Details of GGLB e-Bidding schedule in the second quarter of FY2017
Re-open GGLB197A                         Re-open GGLB21NA
Amount (million baht)                   Not exceeding 5,000                                     Not exceeding 5,000
Time to Maturity                         2 years 5 months                                         4 years 8 months
Bidding Date                             Monday, 20th February 2017                               Monday, 20th March 2017
Payment Date (T+2)                       Wednesday, 22nd February 2017                           Wednesday, 22nd March 2017
Repayment Date                           27 July 2019                                             26 November 2021
Guarantor                               Ministry of Finance (MOF standard Guarantee Agreement)
Principle and Interest Financing Agent   Government

PDMO plans to maintain regular issuance of GGLB throughout the year, where auction results and system performance will be closely monitored. Since GGLB and LB have similar tenors as BOT's Bond, PDMO and BOT have agreed to ensure no competing issuances at any one time. Furthermore, PDMO will co-operate with ThaiBMA and MOF Outright PDs to encourage investors to participate in the primary market and to ensure liquidity in the secondary market. While PDs will assist in investor communication on features of GGLB, ThaiBMA will further develop SOE Spread Matrix, which will set benchmark for other SOEs borrowings. Given such, we would appreciate your value feedback and suggestions. Quarterly GGLB issuance schedule along with SOEs borrowing schedule will be posted on the PDMO's website at least 1 week prior to the relevant quarter. PDMO would like to thank you in advance for your participation. For any queries please contact 02-265-8050 ext. 5719.

Public Debt Management Office Tel. 02-265-8050 ext. 5719

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