Dollar bond sales to be revived

Dollar bond sales to be revived

The Thai government is preparing to revive sales of dollar-denominated bonds and plans to issue the first such notes since 2006 next year, according to the Public Debt Management Office.

The government will offer $1 billion to $1.5 billion worth of five- or 10-year securities in 2014 and will continue with dollar-bond issues every year over the next decade, said Chularat Suteethorn.

The timing of next year's sale would depend on whether political tensions abate, and on the outlook for US interest rates and the baht, she added.

"What we're considering is we should maintain a presence in international capital markets at all times, and not only when we're in trouble," said Ms Chularat, adding that the money raised would be used to fund infrastructure projects.

Global funds are pulling money from Thailand as protests escalate over a government proposal to grant amnesty to people involved in political clashes since 2004.

Foreign investors have sold $393 million more in local bonds than they bought from Oct 28 to Nov 4, Thai Bond Market Association data show.

The Finance Ministry expects the Senate to start second and third readings on Nov 18 of a bill to finance 2 trillion baht worth of infrastructure projects over seven years.

Should the bill be cleared in the current parliamentary session ending Nov 28, it will be forwarded to His Majesty the King for endorsement.

A maximum of 15% to 20% of the infrastructure programme will be funded through dollar bonds, and the money will be used to pay for imports, said Ms Chularat.

"Within the 2-trillion-baht investments, there will be some imported content," she said. "So borrowing in dollars seems to be appropriate."

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