New savings bonds in Q2
Issuance to offset the budget deficit
Ms. Patricia says the attractive interest rates have made the first batch of savings bonds attractive to investors. Varuth Hirunyatheb
The Public Debt Management Office (PDMO) is expected to issue another batch of government savings bonds, worth 70 billion baht, in the second quarter of next year to meet strong demand, a said Managing Director Patricia Mongkhonvanit.
The PDMO plans to offer total savings bonds worth 150 billion baht in fiscal year 2022, of which 80 billion was the first batch available between November 15 and December 3. They were sold out shortly after their availability, Ms Patricia said.
The bond issue is expected to offset the country’s budget deficit in fiscal year 2022.
She said the attractive interest rates for the first batch were one of the main reasons for the enthusiastic response from investors.
For example, five-year bonds offer an average interest rate of 2.1%, while 10-year bonds offer an average rate of 3%. Government bonds also carry low risk.
The timing of these bond issues is designed to attract investors because their publication differs from the issuance of corporate bonds, Ms. Patricia said.
In the first batch, bonds worth 10 billion baht were available to individual investors on the electronic wallet “Sasom Bond Mung Kung”, abbreviated as “Sor Bor Mor” in Thai, on the mobile application Pao Tang of Krungthai Bank. These bonds were sold within 12 minutes of the offering started on November 15.
Of the remaining 70 billion baht, the bonds worth 55 billion were intended for individual investors. They were offered between November 22 and December 3 at the counters of four concessionary banks – Krungthai Bank, Bangkok Bank, Kasikornbank and Siam Commercial Bank – and their mobile banking applications.
The remaining 15 billion baht was intended for non-profit organizations. They were only offered at the counters of the four bankers from November 24 to December 3.