Finance ministry’s vigilant watch over corporate debenture repayments

Corporate debenture repayments are under the watchful eyes of the Finance Ministry, according to a statement by Lavaron Sangsnit, its permanent secretary. The ministry, along with the Bank of Thailand (BoT) and the Securities and Exchange Commission (SEC), are vigilantly monitoring potential defaults on maturing debentures.

In a recent evaluation, it emerged that only a single company was struggling to secure funds to repay debentures. Lavaron reassured that the ministry and associated agencies are prepared to promptly intervene should a default occur.

In Lavaron’s view, the capital market is in a position to uphold financial stability. However, a previous announcement by the central bank noted that more corporate issuers are getting negative outlooks or rating actions than in the past, due to enterprise-specific internal factors.

The bank added that investors might exhibit greater caution when it comes to high-yield bond investment, particularly non-rated bonds.

Prime Minister Srettha Thavisin is due to hold a meeting with the Finance Ministry and central bank today to discuss debenture repayment delays and default management measures.

Market stability was tested earlier this week when Italian Thai Development Plc (ITD), a leading contractor in the country, announced its intention to delay principal repayments on 14.3 billion baht worth of debentures by two years. The news led to a 12% drop in ITD shares.

By Alex Morgan

Caption: PHOTO: via Times New