Slow sales for rice bonds

Slow sales for rice bonds

Sales of the 100-billion-baht government bond issued to clear rice-pledging debts have not been brisk on the first day on Monday, with Krungthai Bank showing the highest numbers.

A buyer talks to a Bangkok Bank employee about the bonds at the bank's head office on Silom Road in Bangkok on Jan 12, 2015. (Photo by Apichart Jinakul)

Luck Wajananawat, president of the Bank of Agriculture and Agricultural Cooperatives (BAAC), said the bank had sold 391 million baht to 439 buyers as of 11am.

"We hope to sell 1 billion baht today and around 10 billion baht in a week. After all, the bonds give a 3.8% interest rate compared to 2.7% to 2.8% people get from five-year fixed deposits at present," he said.

Krungthai Bank sold 1 billion baht while Bangkok Bank, Kasikornbank and Siam Commercial Bank each sold 400-500 million baht as of 11am.

The Finance Ministry and the BAAC announced the launch of two tranches on bonds on Dec 5.

The 50-billion-baht lot, issued by the Finance Ministry, has a 10-year maturity. It carries progressive interest rates — 3% in the first three years, 4% in the 4th to 7th years and 5% in the 8th to 10th years.

The other 50-billion-baht tranche, issued by the BAAC, has a five-year maturity with a fixed interest rate at 3.8%.

Both lots, to be guaranteed by the Finance Ministry, set the minimum purchase at 1,000 baht and the maximum at 2 million baht in the first phase, which runs from today to Sunday. There is no quantity limit on the purchases in the second phase from Jan 19-23.

Bangkok Bank, Krungthai Bank, Kasikornbank and Siam Commercial Bank are the underwriters. They can be bought at the BAAC's branches, in addition to those of the four underwriting banks, during Jan 12-23.

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