The Public Debt Management Office (PDMO) expects the proportion of baht-denominated bonds issued by foreign entities will increase to 3% by next year, making Thailand a regional fund-raising hub.
Achieving this goal will require four to six foreign entities averaging US$100 million in fund-raising size each to issue baht-denominated bonds per year, a source said yesterday.
Outstanding baht-denominated bonds amounted to 91.3 billion baht as of Dec 31, representing 1% of overall bonds.
South Korea was the biggest baht bond issuer at 59%, followed by Laos at 18%.
Governments, state enterprises and companies in Cambodia, Laos, Myanmar and Vietnam are increasingly keen on raising funds in the Thai capital market through baht-denominated bond issues after the PDMO eased requirements for bond issuers in these countries.
According to current regulations, baht bond issuers from those four countries can use credit ratings assigned by Thailand's rating agencies instead of international agencies in cases where their papers are not guaranteed by their government.
For guaranteed bonds, the issuers can launch unrated bonds in Thailand.
The loosened requirements will be a boon to Asean's financial market and also support inclusive regional growth, the source said.
Laotian state-majority-owned power producer EDL-Generation Plc is the latest to raise funds from Thailand's capital market.
It floated bonds worth 6.5 billion baht in Thailand last October to finance its acquisition of nine hydropower plants from parent Electricite du Laos.
The Laotian government last year also issued 9 billion baht in baht-denominated bonds, launched in three batches worth 1.5 billion, 3 billion and 4.5 billion baht.