Office targets B20bn in sustainable bond sales
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Office targets B20bn in sustainable bond sales

The Public Debt Management Office (PDMO) is preparing to sell 20 billion baht worth of sustainable bonds to institutional investors this year.

According to Jindarat Viriyataveekul, public debt advisor for PDMO, the office has issued sustainable bonds for businesses that want to operate according to environmental, social and governance (ESG) principles.

Sustainable bonds fall into the ESG bond category.

PDMO has outstanding ESG bonds worth a total of 467 billion baht, which represents 5.6% of all PDMO bonds.

The issuance of ESG bonds will continue annually to establish a benchmark for this type of bond, Mrs Jindarat said.

Regarding the issuance of bonds abroad, she said PDMO is studying the pros and cons to make a proposal to the finance minister, with foreign investors showing interest in Thai government bonds.

According to Mrs Jindarat, the purpose of issuing bonds abroad would be to create a benchmark for Thai companies that want to issue bonds internationally in the future.

"The tactic of raising funds through issuing foreign currency bonds accommodates financial market volatility in cases where the domestic bond and financial markets are tight," she said.

"PDMO can consider borrowing from abroad under Section 22 of the Public Debt Management Act to support economic and social development as necessary. Thailand's foreign currency public debt level is relatively low.

"However, the primary factor for PDMO to consider is the cost of issuing foreign currency bonds, which is currently higher than issuing bonds domestically."

Mrs Jindarat said the issuance of foreign currency bonds by the government could have positive impacts, such as allowing the Thai government to access a broader range of funding sources and reducing the risk of crowding out private sector capital.

Another benefit would be providing a reference cost for the Thai private sector to issue such bonds, she said.

According to the Thai Bond Market Association, ESG bonds are classified into four categories: green bonds, social bonds, sustainability bonds, and sustainability-linked bonds.

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