PDMO to sell 100 billion baht savings bonds for budget deficit funding

The Public Debt Management Office (PDMO) announced plans to sell 100 billion baht (US$2.78 billion) worth of savings bonds within the fiscal year to finance the budget deficit. The initial issue, valued at 40 billion baht (US$1.1 billion), will be offered next month, according to the director-general of the PDMO, Patchara Anuntasilpa.

The first tranche of savings bonds for the fiscal year 2024 will be launched via two platforms: the Pao Tang application and various commercial banks. The public can download the Pao Tang app, register, and deposit money either through mobile banking to the PDMO’s digital wallet or at any Krungthai Bank using the wallet ID. Alternatively, the bonds can be purchased directly from commercial banks such as Krungthai Bank, Bangkok Bank, Kasikorn Bank, and Siam Commercial Bank.

The first lot of the bonds, available to Thai nationals aged 15 and over, will be on sale from March 11 to 13. These bonds, totalling 35 billion baht (US$974 million), will have a maturity of five and 10 years and will offer an annual coupon of 3% and 3.4% respectively.

The interest is set to be paid every three months. Each unit is priced at 100 baht, with a minimum purchase of 1,000 baht and no maximum limit. Bond allocation will be random, and the buyers will be informed of the results on March 14, with any unallocated or partially allocated bonds being refunded, reported Bangkok Post.

The second lot, available from March 18 to 19, targets foundations, associations, cooperatives, temples, public educational institutions, public hospitals, condominiums and housing juristic persons, and other non-profit juristic persons. The bonds, worth 5 billion baht (US$139 million), have a maturity of 10 years with an annual coupon of 3%. Interest payments will be made every six months, with each unit priced at 100 baht. The minimum purchase is 1,000 baht, with no limit on the maximum purchase amount.

The PDMO clarified that the amount sold via its digital wallet and commercial banks will be separate, and investors can choose to invest through both channels. Interested parties are encouraged to study the prospectus for additional details or seek further information from the four commercial banks.

Excluding the planned 40 billion baht sale, the outstanding government savings bonds stand at 620 billion baht. The PDMO justified the chosen 5-year and 10-year maturity periods by noting that the majority of buyers are older people.

In related news, the Thai bond market is projected strong with 1 trillion baht in issuances in 2024.