Bangkok--19 May--KASIKORNBANK
Laotian Ministry of Finance, on April 30, 2015, obtained permission from the Thai Ministry of Finance to issue Baht-denominated bonds valued at 12 billion Baht, with over three-year tenor. Funds raised from this issuance are intended to be spent on Laotian economic development and investment in projects that support government income and ready the country for the forthcoming AEC, said Mr. Rithikone Phoummasack, Deputy Director General, External Finance Department, Ministry of Finance of Lao PDR.
Mr. Adisorn V. Singhsacha, Managing Director of Twin Pine Consulting Co., Ltd., acting as a financial consultant for this issuance, said that this would be the fourth such issuance of Baht-denominated bonds by Lao PDR’s Ministry of Finance after first issuing bonds in May 2013. Being the first foreign government permitted to sell Baht-denominated bonds, Laotian government’s previous issuances were well received by Thai institutional investors, as well as large-cap investors, who saw the bonds as a new investment option.
The Laotian government is now preparing the filing documents for the Office of the Securities and Exchange Commission of Thailand (SEC). It has also assigned TRIS Rating to evaluate its credit worthiness, although Lao PDR’s Ministry of Finance, whose status is equivalent to a foreign state organization, is not required to do so. However, to increase investors’ confidence, the Ministry employs the services of TRIS Rating and the credit score will be announced later. The initial public offering will be made via Thai leading commercial banks sometime around June this year.
To acquaint investors who invested in Laotian bonds in past issuances, Lao PDR’s government staged the seminar titled “Economy of Lao PDR and Investment Opportunity for Thai” in mid-May. This briefing also gave preliminary information to potential investors for an upcoming issuance. Supported by stable politics, Lao PDR have for many years enjoyed continuous economic growth with the GDP growth rate averaging in the order of 7.9 percent over the past five years (2009-2013). Such stellar economic performance has been made possible by contributions from four primary domains, namely, the industrial, agricultural and service sectors, plus import taxes. The nation’s 2013 inflation rate stood at 6.4 percent with a policy to control the figure within a single-digit rate. Lao PDR is abundant in natural resources, e.g., gold, copper and hydropower energy and also a major energy exporter with Thailand, China and Vietnam as important buyers.