Thailand to issue US$1.1 billion sustainability-linked bonds

Thailand will issue up to US$1.1 billion (40 billion baht) in baht-denominated sustainability-linked bonds (SLBs) in the coming months, marking the first such offering by an Asian government. This initiative aims to address both the nation’s budget deficit and its environmental commitments.

According to the public debt advisor at the Ministry of Finance, Jindarat Viriyataveekul, the proceeds from the bond sale are earmarked for programs focused on reducing carbon emissions. She noted that the bonds would be available to both local and international institutional investors.

“The demand is quite good…investors have shown strong interest in this green financing in line with a growing global trend.”

Prime Minister Srettha Thavisin is intensifying efforts to highlight Thailand’s sustainability initiatives as a key attraction for foreign investors with firms like BlackRock Inc. and Intesa Sanpaolo SpA expressing their keen interest in the upcoming SLB sale.

Thailand has committed to achieving carbon neutrality by 2050, aligning with broader global sustainability goals.

The SLB issuance is scheduled before any potential government sale of foreign-currency bonds, a plan currently under review by the Ministry of Finance.

Jindarat explained that the weak baht and the uncertain monetary policy of the US Federal Reserve have made issuing foreign-currency bonds less appealing.

She also mentioned that SLBs offer more flexibility compared to the sustainability bonds previously issued by the government. This flexibility in the use of proceeds is seen as a significant advantage, potentially making SLBs a more attractive option for future financing needs, reported Bangkok Post.

In related news, the Finance Ministry plans to reassess its shareholdings in various stocks to optimise its asset portfolio and generate additional revenue for the state.

Deputy Finance Minister Paopoom Rojanasakul instructed the State Enterprise Policy Office to evaluate the ministry’s stock holdings. According to sources, this review aims to identify which assets the government should retain and which could be sold.