Biggest state bond issue to be launched this month

[Jonathan Fairfield]

Biggest state bond issue to be launched this month

ERICH PARPART

BANGKOK:-- THE Finance Ministry will issue government bonds worth Bt50 billion, the highest ever, with three-year maturity and 3-per-cent interest, to apply to the 2016 fiscal budget deficit of Bt390 billion, while the Government Pension Fund is set to pay back Bt54 billion to retired civil servants.

"We expect more retired civil servants to buy this round of government bonds that will be offered from October 19 to February 29, 2016, with a minimum purchase of Bt1,000 and a maximum of Bt2 million per person per account," said Suwit Rojanavanich, director-general of the Public Debt Management Office.

The four banks that will offer the bonds are Krungthai Bank, Siam Commercial Bank, Bangkok Bank and Kasikornbank.

Meanwhile, the amount of public debt reached Bt5.73 trillion or 42.81 per cent of gross domestic product at the end of August, of which Bt5.3 trillion was domestic debt and Bt352 billion foreign debt.

Public debt increased by Bt18.171 billion from the end of July, while outstanding government debt increased by Bt19.508 billion in the same period when Bt33 billion in loans were used to make up the deficit and Bt6.025 billion in investment loans.

Of the Bt6.025 billion in investment loans, Bt2.661 billion were re-loans to state-owned enterprises for use in construction of MRT urban rail lines, the renovation of eight State Railway of Thailand railways and the purchase of Airbus planes for Thai Airways International, while another Bt3.147 billion were loans in baht to pay off foreign-currency debts.

Of the Bt2.661 billion, the Mass Rapid Transit Authority received Bt791.67 billion in loans for construction of three rail lines: Bt401.17 billion for the Blue Line extension, Bt226.18 billion for the Green Line and Bt164.32 billion for the Purple Line.

The MRT Blue Line currently runs from Hua Lamphong to Bang Sue and the 27-kilometre extension will form a loop where the current terminus at Bang Sue is being extended to Tao Poon as part of the Purple Line project.

Of the debt owed to the Financial Institutions Development Fund, Bt270.771 billion had been paid off as of the end of fiscal 2015, leaving outstanding FIDF debt of Bt998.791 billion.

Source: http://www.nationmultimedia.com/business/Biggest-state-bond-issue-to-be-launched-this-month-30271051.html

-- The Nation 2015-10-17

[stoneyboy]

The futures looking bright then.

[Christie Paul]

This should be watched carefully.

Government debt is imploding all over the world.

Long term paper is being dumped for short term.

Governments never pay - they just roll the debt, but as the economy turns down their income will fall.

So they'll increase taxes and the economy will turn down even further.

[SOTIRIOS]

...considering 10x that...at least...diappeared with the rice scheme.....

...I wonder why people are saying....'Thai banks have no money to pay big accounts or money transfers'.....

[Thai at Heart]

Be interesting to see how this sale goes.. At 3% for 3 years it's a generous offer.

[JAG]

Why should " retired civil servants" be the expected buyers?

[Nuddy]

Actually JAG, thats a very good question. Whilst I was sitting on my bar stool sucking down a few Heinekens I got to thinking about your question and the comment by the OP on that aspect. I thought maybe the Govt had some idea by launching a 50Mill Baht option to invest at the same time they were generously paying out 54 mill Baht to the Retired Civil Servants, these retired guys would be so surplus in dosh they would immediately look to invest it. At 3% G'teed by the Govt why not? Hehe. Actually maybe the Govt are actually saying the retired guys "must" do that? In my thoughts, I reckon these retired guys would not have the 'spare rub" to invest anyhow and probably are struggling still to keep up appearances without the usual kickback system since they are retired, huh? The question of is this payment by Govt a special once off payment of 54Mill Baht or is the govt just talking about the collective monthly payouts over time? Yep where is your answer JAG, I can hear you saying it?

Well I do not know the answer but ask one question myself. Are these 3% 3 year bonds better than putting the dosh into the banks here? Maybe you or some others could make a recommendation on that aspect?

Regards.

[JAG]

Sorry, I don't know the answer. That's why I asked the question!

A cynic (moi - perish the thought) might wonder whether an improved Civil Service pension is in some way linked to bond purchase, but as I said, I don't know.

As for putting money in the bank - well with a wife and daughter, a teacher's salary and a small army pension frankly it's not even on my radar!

All the same thanks for asking me for money advice - that's rather made my day.

Edited October 17, 2015 by JAG

[Srikcir]

"THE Finance Ministry will issue government bonds worth Bt50 billion, the highest ever, with three-year maturity and 3-per-cent interest"

FACT CHECK: Untrue. It is the second highest ever.

"The Finance Ministry has issued bonds worth 50 billion baht, the biggest-ever bond issuance in history, in its latest move to restructure the debts incurred from the rice-mortgage scheme from the previous administration." 2014-11-26