June 2012
Domestic Bond Market Development (2012 – 2015) A. Evolution of Bond Market Development (1995 – Present) • Innovation of Government Debt Securities • Equilibrium of Thai Bond Market
B. Building up of Benchmark Bond (FY2007 - FY2012) • Revised the Strategy of Benchmark Bond Issuance • Commitment of Bond Supply • FY 2012 Market’s Favorite Benchmark Bond
C. Bond Supply FY2012 + Funding Needs FY2012 - FY2015 D. Well-Developed Bond Market Improved Government Debt Profile Dramatically • ATM Lengthened • Cost Lowered • Well-Balanced Fixed-Float Ratio • Well-Distributed Maturity Profile
50-year Benchmark Bond March 2nd 2011
12-year and 18-year Fixed-rate Promissory Bond
30-year Benchmark Bond
December 22nd 2010
April 23nd 2008
10-year Inflation Linked Bond July 11th 2011
6-year Step-up Savings Bond
5-year Step-up Savings Bond
June 7th 2010
July 15th 2009
4-year Floating Rate Bond
3-year Retail Bond @ ATM
July 27th 2009
September 12th 2011
FY 2008
2009
Chakkrit Parapuntakul, Director General juk@mof.go.th
2010
2011
2012-2013
Public Debt Management Office Ministry of Finance Kingdom of Thailand
1
A. Evolution of Bond Market Development (1995 – Present) Public Debt Management Office, Ministry of Finance, Kingdom of Thailand
• Thai Bond Market Has Grown Strongly for More Than a Decade
• The Thai Bond Market Has Developed Rapidly and Efficiently • Innovation of Government Debt Securities (FY2007 – FY2013)
• Equilibrium of Thai Bond Market • By Issuers • By Credit Rating • By Investors
2
Thai Bond Market Has Grown Strongly for More Than a Decade Public Debt Management Office, Ministry of Finance, Kingdom of Thailand
% of GDP
Domestic Bond Market Capitalisation = 7.7 THB Trillion
128%
140%
As of March 2012 (Classified by Types of Issuers)
120% 100%
92% 77%
80%
67%
60%
24%
40%
7.7 THB Trillion
Asian Fin. Crisis
20%
1%
Corp. Bond
19%
SOE Bond
6%
March 2012
Bank Laon / GDP
Equity / GDP
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
12% 1992
0%
Baht Bond
BOT Bond
Bond Market / GDP
Maturity Profile
2.9 THB Trillion
38%
BOT ATM = 1 yr GOVT ATM = 6 yrs 7 mts
BOT vs GOVT Bond 14%
68% BOT < 1 yr
GOVT Bond 18% MOF
29%
20% 3%
28%
20%
2-3 yr
3-5 yr
6-10 yr
11-50 yr
2.7 THB Trillion
36%
Bond Market Developed Rapidlyand andEfficiently Efficiently The The ThaiThai Bond Market hasHas Developed Rapidly Public Debt Management Office, Ministry of Finance, Kingdom of Thailand
Post Crisis – 2000 :
2007 – 2010 :
Next Step 2011-13:
Bond Market Capitalisation tripled Government Bonds Outstanding grew by 50 times Government Bond Market Share jumped from 3% in 1997 to 44% in 2000
Regular Benchmark Issuance New Product Development Regular Market Dialogue with BoT and PDs
(Market Deepening Oriented) 50-yr Bond, ILB, Electronic Retail Bond Upgrade PD Privileges Regional Linkage (CGIF) Amortizing Bond Bond Switching and Bond Consolidation
Volume Oriented
Development Oriented
3
Pre-Crisis - Illiquid Bond Market - Absence of Benchmark Bond - Dominated by SoE’s Bonds
% of GDP
THB Trillion
67%
FY2007 – FY2013
Innovation of GOV’T Debt Securities
FY 2012-2013
FY 2011
FY 2007-10
Public Debt Management Office, Ministry of Finance, Kingdom of Thailand
30-yr Loan Bond
• Lengthen average-time-to-maturity ATM Government Debt Portfolio 5.7 yrs to 6.1 yr • Meet long term investors’ demand
Floating Rate Bond
• Increase floating debt ratio (10% to 18%) • Promote BIBOR (Bangkok Interbank Offered Rate)
Step-up Savings Bond
• Broaden investor base – Retail investors • Low interest burden at the initial periods of bond
Fixed Rate Promissory Note
• Broaden investor base – Insurance / Long-term investors • Non-Benchmark tenors
50-yr Loan Bond
• Combat low interest rate + Lengthen average time-to-maturity • 4th country in the world (1st : UK 2nd : France 3rd : China)
Inflation-Linked Bond (ILB)
• Strong anti-inflationary signal • Deepen the Development of the Bond market • 1st country in Emerging Asian Economies
Retail Bond @ ATM for Micro Savers
• Lower Minimum Amount to Purchase • Offer throughout the year • Can be purchased via ATM, in addition of Bank Retail Branches
Amortizing Bond
• Suitable financing instrument for the government’s investment mega-project in the form of PPP • Pay back the bond principal by installments Promote the government’s fiscal discipline
Bond Switching & Consolidation
• Allow both issuer and investors to manage and improve their portfolio • Larger outstanding size + Less bond series more liquidity in the secondary market
PDDF
Upgrade PD Privileges
CGIF
Baht Bond
(Public Debt Restructuring and Domestic Bond Market Development Fund)
(Credit Guarantee and Investment Facility)
Equilibrium of Thai Bond Market Public Debt Management Office, Ministry of Finance, Kingdom of Thailand
Issuers
• 80 percent of Thailand’s debt securities were issued by Government, Central bank and State-owned Enterprises
Credit Rating
• 98 percent of Thailand’s debt securities are classified as Investment Grade by local rating agencies
Investors
• Thailand’s government debt securities are held by a wide group of investor types
Thailand Bond Market (Classified by Issuers)
Thailand Bond Market (Classified by Credit Rating)
Government Bonds (Classified by Types of Investors)
BBB Non-rated
2% 2%
A AA
Private Sector
20% SOEs
CB 6%
7%
NR12%
5% AAA
Government
36%
6% Central Bank
38% Source : ThaiBMA (12 April 2012)
4%
Government
SOEs
36%
6
%
Central Bank
38% Source : ThaiBMA (12 April 2012)
Household and Non-profit
Insurance and Other Corporation
33%
15% Depository Corporation
35% Source : CB (30 January 2012)
4
5
B. Building up of Benchmark Bond (FY2007-FY2012) Public Debt Management Office, Ministry of Finance, Kingdom of Thailand
• 2007: PDMO Revised the Strategy of Benchmark Bond Issuance in 3 Ways
• Keep Our Word to get Investor Confidence for the Plan Firm Committed Supply of Benchmark Bond Regardless of Budget Uncertainty • Key Success Indicators (FY2008 – FY2011) • Trading Volume • Turnover Ratio • Demand Concentration • Auction Price
• Market’s Favorite Benchmark Bond (FY 2012) • By Outstanding • By Trading Value • By On-the-run Benchmark Tenors
6
• 2007: PDMO Revised the Strategy of Benchmark Bond
2550 ต Issuance ด 2007: PDMO Revised the Strategy of Benchmarkต Bond in 3 ways
Issuance in 3 Ways I. Reduce Auction Frequency
,
Public Debt Management Office, Ministry of Finance, Kingdom of Thailand
from Once a Week
to
Every Other Month
• Full Capacity of All Government Debt Securities (2012)
II. Increase Auction Size
(to Create Even Distribution of the Benchmark Bond Supply over the Year)
Tenors: 3-5-7-10 yr 15,00020,000
1,100,000 THB Mil
Unit : THB Mil
10,00012,000
15,00020,000
12,00015,000
•Keep Our Word6,000to get Investor Confidence for Plan 8,00010,000
8,000
4,000
Firm CommittedFYSupply FYof Benchmark Bond Regardless FY FY FY FY FYofF
III. Increase Outstanding Size
Budget Uncertainty
Tenors: 3-5-7-10 yr 150,000200,000
Unit : THB Mil
• Key Success Indicators80,000100,000 50,000• Trading Volume 80,000 40,000 • Turnover Ratio FY FY FY • Demand Concentration • Auction Price
100,000120,000
FY
• Market’s Favorite Benchmark Bond • By Outstanding • By Trading Value • By On-the-run Benchmark Tenors
7
100,000120,000
FY
120,000150,000
FY
FY
F
Keep Our Word to get Investor Confidence for the Plan
Firm Committed Supply of Benchmark Bond Regardless of Budget uncertainty Public Debt Management Office, Ministry of Finance, Kingdom of Thailand
THB Mil.
+40% Plan
FY2009
Actual
+2%
Higher government funding needs due to Stimulus Package
+170%
approx.+250,000 THB Mil.
Total Funding needs increased from:
+33%
+86%
420,000 THB Mil. to 670,000 THB Mil.
59%)
(+
Benchmark Bond
Treasury Balance = 278,694 THB Mil.
Non Benchmark Bond
Savings Bond
T-Bill (Outstanding)
Others
THB Mil.
FY2010
Plan
0%
Actual
+8%
Lower Borrowing needs due to Economic Recovery approx. -160,000 THB Mil.
-45%
+118%
Total Funding needs decreased from:
-51%
800,000 THB Mil to 640,000 THB Mil
(-20%) Benchmark Bond
Treasury Balance = 417,166 THB Mil.
Non Benchmark Bond
Keep Our Word to get Investor Confidence for the Plan
Savings Bond
T-Bill
Others
Firm Committed Supply of Benchmark Bond Regardless of Budget uncertainty Public Debt Management Office, Ministry of Finance, Kingdom of Thailand
THB Mill
FY 2011
Plan
Actual
-3%
Higher than expected Revenue collection approx. -250,000
THB Mil.
Total Funding needs decreased from: 700,000 THB Mil to 400,000 THB Mil
-38%
(- 36%)
-26% +344%
Benchmark Bond
Treasury Balance = 510,180 THB Mil.
Non Benchmark Bond
Savings Bond
T-Bill (Outstanding)
ILB
-85%
Others
8
FY 2008-FY2011 Key Success Indicators FY 2008-FY2011 Key Success Indicators
1. Trading Volume 2. Turnover Ratio 3. Demand Concentration 4. 1. Trading Volume 2. Auction TurnoverPrice Ratio Public Debt Management Office, Ministry of Finance, Kingdom of Thailand 3. Demand Concentration 4. Auction Price
5 yr Benchmark Bond : Highest Secondary Trading Volume in
every year (accounted for ¼ of total trading volume) 5 yr Benchmark Bond : Highest Secondary Trading Volume in Unit: %year share(accounted of Market for ¼ of total trading volume) every Trading Volume Unit: % share of Market % Trading Volume %
27 27%
9 9
7% 7% FY
20% 20%
28 28%
20% 20%
9
5 yr Benchmark Bond : Higher Turnover Ratio LB155A
FY
FY
FY
FY
76% 76%
77% 77%
80% 80%
84 84%
LB155A
LB133A
LB15DA
LB133A LB145B LB133A
LB133A
1.5 1.5
Top FY 10 Gov’t Bond SeriesFY– Accounted FY for 84%FYof all Gov’t FY Bond trading in Secondary Trading Volume Top 10 Gov’t Bond Series – Accounted for 84% of all Gov’t Unit: share of Bond%trading in Market Secondary Trading Volume Trading Volume Unit: % share of Market % Trading Volume
75% 75%
Public Debt Management Office, Ministry of Finance, Kingdom of Thailand
5 yr Benchmark Bond : Higher Turnover Ratio
FY
LB15DA
4.2 3.1 2.4 4.2 2.8 3.1 2.8 2.4 LB145B
FY
FY
FY
FY
Well developed Benchmark size FY FYBond pays FY off : Even FY with greater FY of issuance, the cost of funding is still at market rate Well developed Benchmark Bond pays off : Even with greater size Unit: Billion the USDcost of funding is still at market rate of issuance, +3.2 bps +1.4 bps
Unit: Billion USD +1.4 bps
+1.2 bps
12.8
+1.2 bps
12.8
7.5
14.7
14.7
+3.2 bps
15.0
15.0
7.5 -0.4 bps
FY
FY
FY
FY
FY
FY08
FY09
FY10 -0.4 bps
FY11
FY
FY
FY
FY
FY
FY08
FY09
FY10
FY11
Total GOVT Bond = 45 Series
TOP 5
(2,277,XXX THB Mil)
> 100,000 THB Mil in Size (45% of Trading Volume)
Next 10 > 50,000 THB Mil in Size
(28% of Trading Volume)
Public Debt Management Office, Ministry of Finance, Kingdom of Thailand
Outstanding size (THB Mil.)
FY-to-date Market Share of Trading Volume in Secondary Market (Oct 11-Apr 12)
Top 5 (>100,000)
3
TOP 5
Next 10
Bottom 30
45%
28%
27%
3
Next 10
0
50
100
(50,000-100,000) FY 2012 on-the-run LBs
10
ILB 10 %
%
5 30
FRB 50
2
30
9
A
A
A LB
A LB
15
LB A LB326A LB DA LB27DA
LB A LB616A
A
LB165A LB A
OA LB
LB
A
NA LB
A
LB
LB
LB
A
NA
LB
7
LB A LB193A
DA LB
A
LB A LB416A
A
LB
A
1
LB
5 13 19
A
2
LB
A LB
7
LB
A
LB
DA
A
DA
LB
LB
A LB
FY 2012 Market’s Favorites
5
2
LB
A LB
4
A
A LB
1
DA
A LB
7
LB
A LB
4
LB
A
NA LB
9 16
LB A LB176A
A
LB
10
5
LB
10
OA
6
LB
1
ILB217A ILB A
B LB
7
LB21DA LB DA
A
3
A
2
LB
3
LB
LB
B
LB155A LB A
TTM (Year)
LB DA LB15DA
20
LB
5
LB
7
7
3
All 3-5-7-10 on-the-run Benchmark Bond Has Turnover Ratio between 1.2 – 2.7
Classified by Turnover Ratio
(while market turnover ratio = 0.45) Public Debt Management Office, Ministry of Finance, Kingdom of Thailand
3
On-the-run Benchmark Bond (Expected Outstanding Size @ end of FY 2012)
Turnover Ratio
Outstanding ≥ 100,000 MB Outstanding 50,000-100,000 MB Outstanding ≤ 50,000 MB
2.7
FY 2012 on-the-run LBs
2.3
2 1.6
3
3
30
DA LB
A
A LB
LB
A LB
A
A LB
LB
OA LB
A
A LB
LB
A LB
A
A LB
NA
A LB
LB
A LB
LB
A
DA LB
A
A LB
LB
A LB
LB
A
A LB
DA
A LB
LB
A LB
LB
A
NA
LB
LB
DA LB
B
A LB
A
NA LB
A
A LB
LB
A LB
LB
A LB
10 20 5
LB
A
A
B LB
LB
A LB
15
ILB
DA LB
OA LB
DA LB
10
LB DA LB AA LB LB155A
LB21DA LB DA
7
A
LB193A LB A
5
LB
LB A LB176A
1
LB DA LB15DA LB A
1.2 1.2
50
Turnover Ratio 0.2 – 1.0
Nearly No Trading
10
C. Bond Supply FY2012 + Funding Needs FY2012-FY2015 Public Debt Management Office, Ministry of Finance, Kingdom of Thailand
• Annual Funding Needs Will Always Be around 600,000 THB Mil. (FY2012-FY2015)
• FY2012 Fund Raising Plan by Bill & Instruments (Including Water Management and Insurance Decree ) • Fiscal Year-to-Date 2012 GOV’T Fund Raising = 426,xxx THB Mil.
• Funding Instruments : Local Bond Market VS Foreign Bond Markets • Structure of Thai Inflation Linked Bond (Inaugural ILB, July 2011)
11
Annual Funding Needs Will Always Be around 600,000 THB Mil. Public Debt Management Office, Ministry of Finance, Kingdom of Thailand
TENTATIVE
Water Decree
THB Mil.
350,000
1,000,000
06/13
Insurance Decree
50,000
TKK Restructuring 94,170
80,000
FIDF 500,000
98,161
TKK
Restructuring 67,740
260,000
FIDF
340,122
Restructuring 58,940
FIDF
Annual Funding Needs (THB Mil.)
25,000 56,582
441,061
165,000
Deficit
129,124
64,970
139,171
113,014
25,000
52,000
232,575
172,003
199,239
300,000
300,000
58,940
75,171
219,222
400,000
Deficit
200,666
300,000
Deficit
2008
2009
2010
2011
2012F
2013 F
2014 F
2015 F
246,582
686,962
656,746
424,620
1,140,122*
536,973
722,533
653,333
*Not Including Pre-Mature Debt Restructuring of 167,000 THB Mil. (TKK = 149,000 THB Mil. & FIDF = 18,000 THB Mil.)
FY 2012 Fund Raising Plan by Bill
• Deficit • FIDF
400,000 340,122
• Water • Insurance
350,000 50,000
• Pre-Mature Debt – TKK Restructuring – FIDF Conversion
149,000 18,000
As of April 26, 2012
1,140,122MB
1,307,122MB
Public Debt Management Office, Ministry of Finance, Kingdom of Thailand
Insurance
THB Mil.
TENTATIVE
Water
600,000
17%
300,000
9% FIDF, 121,099
Pre-Mature TKK Restructuring, 31,000
35% Pre-Mature TKK Restructuring, 71,000
39%
Pre-Mature FIDF Conversion, 18,000
Pre-Mature TKK Restructuring, 47,000
FIDF, 81,023
FIDF, 48,000 FIDF, 90,000
Deficit, 93,610
Deficit, 143,736
Deficit, 162,654
-
Q1
Q2
Q3
Q4
121,099 MB
214,610 MB
462,736 MB
508,677 MB 12
FY2012 Fund Raising Plan by Instruments (Including Water Management and Insurance Decree ) Public Debt Management Office, Ministry of Finance, Kingdom of Thailand
Units : THB Mil.
Instruments
Tenors (Yrs)
1. Government Bond 1.1 Benchmark Bond
Sizable Outstanding Amount → To Enhance Liquidity Regular Issuance → To Build Yield Curve
70,000 100,000 65,000 52,110 35,000 35,000 26,436 25,000 48,450 60,000 105,000
4 (LB165A) 10 (ILB217A)
1.2 Floating Rate Bond(FRB) 1.3 Inflation Linked Bond (ILB) 2. Savings Bond / Retail Bond 3. Permissory Note (P/N) For FIDF 1 For FIDF 3 For Budget Deficit Pre-Mature FIDF Conversionof P/N
3+ 4+ 4+ 4+
4. Fixed Rate Promissory Note (Fixed-P/N) For Budget Deficit 6. Bank Loan Bank Loan - Water Management Bank Loan - Insurance Pre-Mature TKK Restructuring of Bank Loan
3-year Benchmark ~50,000 MB on LB155A ~ 15x,xxx MB ~20,000 MB on LB15DA ~ 13x,xxx MB
3 (LB155A, LB15DA) 5 (LB176A) 7 (LB193A) 10 (LB21DA) 15 (LB27DA) 20 (LB326A) 30 (LB416A) 50 (LB616A)
Stable Supply → To Maintain Investor Trust
7. R-Bill
26 April 2012
Benchmark Bond :
~400,xxx
THB Mil.
Total Government Bond :
~500,xxx THB Mil.
107,099 19,573 50,654 -18,000*
12/25/40
35,800
2-4 2-4
350,000 50,000 -149,000** 72,000 1,140,122
6 mths Total Funding Needs (Not including Pre-Mature Restructuring) Total Fund Raising
* Restructuring to 5-yr LB (18,000) ** Restructuring to 5-yr LB (16,000), 7-yr LB (22,000), 4-yr FRB (16,000), 20-yr LB (35,000), ILB (60,000)
1,307,122
As of April 26, 2012
FY-to-Date 2012 GOV’T Fund Raising = 426,xxx THB Mil.
By Source
(33% of 1,307,122 THB Mil.) or (47% of Total less Decree)
(As of 20 April 2012) (As of April 26, 2012)
Public Debt Management Office, Ministry of Finance, Kingdom of Thailand
New Funding = 800,000
Debt Restructuring = 507,122
THB Mil
Funding Needs = 1,140,122 THB Mil
229,154 UN-Raised 170,846
Units : THB Mil.
350,000
130,573 UN-Raised 209,549
43%
62%
103,000
50,000 Raised
UN-Raised
Deficit
Budget Deficit (400,000)
Water Decree
THB Mil.
0%
UN-Raised
UN-Raised 31% 18,000 46,000 0% Pre-Mature Pre-Mature Pre-Mature TKK Pre-Mature FIDF TKK Restructuring FIDF Conversion Restructuring Restructuring (149,000) (18,000)
Raised
0%
Insurance Decree
FIDF FIDF (340,122)
Water Decree Insurance Decree (350,000) (50,000)
FY-to-Date 2012 GOV’T Fund Raising = 426,xxx THB Mil.
By Product
(33% of 1,307,122 THB Mil.) or (47% of Total less Decree)
(As of April 26, 2012)
Units : THB Mil.
R-Bill Bank Loan
0%
Issued
72,000
0%
Plan
Water + Insurance 400,000
91%
P/N
192,899 20,227
SB
5%
5,000
FRB
100,000
ALL LBs = 500,xxx THB Mil.
50%
24,450 24,000
ILB
50%
30,000
LB
COMMITTED Benchmark = 400,xxx THB Mil.
30,000
43% 174,046
13
234,500
Funding Instruments : Local Bond Market VS Foreign Bond Markets Public Debt Management Office, Ministry of Finance, Kingdom of Thailand
Well Diversified Investors Ensures Funding Needs
FYFull2012 Full Capacity* : 1,150,000 Mil Capacity* of All Government Funding Instruments 1,150,000THB THB Mil.
Potential Demand for Gov’t Bond 2012
Public Debt Management Office, Ministry of Finance, Kingdom of Thailand
LB 3 yr
150,000 THB Mil.
LB 5 yr
120,000 THB Mil.
LB 7 yr
80,000 THB Mil.
LB 10 yr
80,000 THB Mil.
LB 15 yr
60,000 THB Mil.
LB 20 yr
60,000 THB Mil.
LB 30 yr
30,000 THB Mil.
LB 50 yr
20,000 THB Mil.
Benchmark Bond
CB 6% LB 5/10 ILB
50
Insurance and Other Corporation
NR12%
30 20
SB
15
10 7 5
Benchmark Bond
~600,000 THB Mil. (52%)
Savings Bond
~100,000 THB Mil. (9%)
Promissory Note
~100,000 THB Mil. (9%)
Fixed Rate Promissory Note ~50,000 THB Mil. (4%)
3
Household and Non-profit
~50,000 THB Mil. (4%)
Floating Rate Bond
Depository Corporation
~200,000 THB Mi (18%)
Total
1,150,000 THB Mil. (100%)
35%
Outstanding of Foreign Debt
Depository Corporations
400
- Retail - Non-profit org.
200
Non-Residence
?
• To keep the presence of KOT Bond (Kingdom of Thailand) in the foreign market
Equiv. 28,000 THB Mil Soft Loans JBIC IBRD Other
Bank loan FRB / LB
• To diversify portfolio of government debt
Equiv. 41,000 THB Mil (1.4% of Gov’t Debt)
Commercial Papers Samurai bond 5 yr 20,000 Yen Mil Samurai bond 7 yr 10,000 Yen Mil MTN 40 USD Mil
400
Source : CB (30 January 2012)
* Under favorable market liquidity + using All funding instruments
Equiv. 13,000 THB Mil
33%
15%
- Life Insurance - Pension Funds
~50,000 THB Mil. (4%)
Inflation-Linked Bond Bank Loan
THB Bil.
P/N LB
64,800 Yen Mil 66 USD Mil 19 USD Mil (as of Oct 2011)
• To maintain KOT Bond as a reference benchmark yield for Thai private sector issuers • To avoid crowding out effect on domestic bond market Concerns : exchange rate risk / swap cost / natural hedging
Structure of Thai Inflation Linked Bond (Inaugural ILB, July 2011) Public Debt Management Office, Ministry of Finance, Kingdom of Thailand
Format
Capital Indexed Bond (with Principle Protection)
Currency
Thai Baht
Tenor
10 years
Programme Size
40,000 THB Mil. (1.3 bil USD equiv.)
Interest Payment
Every 6 months
Index
Headline CPI
Indexation Lag
3 months
Index Ratio
CPIt /CPI0 (TBMA’s calculation)
Real Yield
1.2
Repayment Method
Bullet
Next Step Continuing Issuance
PD’s responsibility
8 INTERNATIONAL AWARDs
Allocations Foreign Institutions
Local Institutions
15,000 MB
20,000 MB
5,000 MB
Local Retail
Subscription : approx. 1.6 times
Enhance ILB liquidity
FY 2012 : Develop regular annual auction plan (every quarter) FY 2012 : Top-up the existing tenor to enhance liquidity : 60,000 THB Mil. (2 USD Bil equiv.) (15,000 THB Mil. each in Feb Apr Jun and Aug) FY 2013 : Issue other Benchmark tenors (5-15years ILBs)
FY 2012 : Maintain portion of successful bid in ILB primary market FY 2013 : Maintain portion of ILB trading in secondary market FY 2013 : Provide firm bid / ask spreads in secondary market Best Sovereign Bond 2011 Best Thailand Deal 2011 Best Local Currency Bond 2011 Best Thailand Deal 2011 Thailand Capital Markets Deal of the Year 2011 Deal of the year from Asia Outstanding Issuer of the Year The Most Impressive Local Currency 2011
Enhance Liquidity
: Asiamoney Awards : Asiamoney Awards : FinanceAsia Achievement Awards : FinanceAsia Achievement Awards : IFRAsia Asia Awards : Euro Money : Asset Asian Awards 2011 : Euroweek Asia
14
D. Well-Developed Bond Market Improved Government Debt Profile Public Debt Management Office, Ministry of Finance, Kingdom of Thailand
• Public Debt Outstanding (as of Dec 2011) = 4.3 THB Trillion (40% of GDP) • Total GOV’T Debt (Direct + FIDF) • Average-Time-to-Maturity (ATM) • Average Cost • Fixed : Float
= 3.04 THB Trillion (71% of Public Debt) = 6y 4m = 4.6% = 82 : 18
• Well-Developed Bond Market Improved GOV’T Direct Debt Profile Dramatically • Average-Time-to-Maturity (ATM) = 7y 5m • Average Cost = 4.4% • Fixed : Float Ratio = 82 : 18 • Maturity Distribution Profile = 52-20-28
• Full Capacity of All Government Funding Instruments (FY2012) 1,150,000 THB Mil
• Maturity Profile of GOV’T Funding Instruments (Strategic Framework) • Average-Time-to-Maturity (ATM) • Fixed : Float • Maturity Distribution Profile
15
= 9y = 70 : 30 = 50-30-20
Public Debt Outstanding (as of Dec 2011) = 4.3 THB Trillion (40% of GDP) Public Debt Management Office, Ministry of Finance, Kingdom of Thailand
Components of Public Debt
Units : THB Mil.
1. Government Debt (excluded FIDF)
1,914,420
2. Government Debt (for FIDF)
1,174,101*
3. Non-Financial State Enterprise Debt
1,061,012
4. Special Financial Institutions Guaranteed Debt Public Debt Outstanding (as of Dec 2012)
Special Financial Institution Guaranteed Debt
3
% 0.15 THB Trillion
148,364 4,297,897
*Including 32,000 THB Mil. of Prefunding
Non-Financial State Enterprise Debt
25%
GOV’T Debt
1.06 THB Trillion
45% 1.95 THB Trillion
GOV’T Debt (for FIDF)
27% 1.17* THB Trillion
16
Average-Time-to-Maturity (ATM) = 6y 4m Average Cost = 4.6% Fixed : Float = 82 : 18 As of Dec 2011
Total GOV’T Debt = 3.04* THB Trillion (71% of Public Debt) * Excluded 45,898 THB Mil. of Foreign Debt
Public Debt Management Office, Ministry of Finance, Kingdom of Thailand Assumptions : 6 months BIBOR = 3.245%, 6 months Fixed Deposit Rate = 2.38125%
FIDF 1
ATM = 4y 8m Avg. Cost = 5.0% Fixed : Float = 82 : 18
FIDF 3
300,000 233,023
Maturity Profile
40%
10 yrs +
14,000
year 6 - 10
35,000
32,000
69,000 63,800
37,900
25,000
7% next 5 yrs
40,000
15,000
GOV’T Debt (for FIDF) = 1.17** THB Trillion 75,000
63,178 39,836
144,099
16,731
64,124 64,970
58,440
-
18,000
100,000
65,000
200,000
53%
TTM Fiscal Year
TKK
ATM = 7y 5m Avg. Cost = 4.4% Fixed : Float = 82 : 18
On-lending Loan
52%
next 5 yrs
year 6 - 10
10 yrs +
13,000
27,000
20,000
5,500
5,000
41,900
28%
-
61,950
50,000
43,000
47,000
Maturity Profile
0000 20%
15,700
18,900 76,700
31,000
-
59,000
40,000
86,632
138,000
145,994
82,230
GOV’T Debt (exclude FIDF) = 1.87*** THB Trillion 93,830
100,000
199,239
172,003
200,000
188,222
58,940
300,000
Budget Deficit 7,612
140,170
**Including 32,000 THB Mil. of Prefunding
TTM Fiscal Year
***Excluded 45,898 THB Mil. of Foreign Debt
(1) (2) (3) (4)
Well-Developed Bond Market Improved GOV’T Direct Debt (1.87 THB Mil.) Profile Dramatically
ATM Lengthened Cost Lowered Well-Balanced Fixed-Float Ratio Well-Distributed Maturity Profile
Public Debt Management Office, Ministry of Finance, Kingdom of Thailand
As of Dec 2007
Average-Time-to-Maturity LENGTHENED by 2 yrs
As of Dec 2011
ATM
7 y 5m
ATM
5y 3m Avg. cost
Avg. Cost LOWERED by 10 bps
4.5%
.
Avg. cost
4.4%
(While ATM Lengthened by 2 yrs)
Float
Well-Balanced Fixed/Float Ratio (Target : Fixed/Float ratio = 80 : 20)
10%
Float
Fixed
Fixed
90%
82%
Maturity Profile as of Dec 2009
61%
Well-Distributed Maturity Profile next 5 yrs
17
Maturity Profile as of Dec 2011
52% 24%
(Target : Maturing Debt in the next 5 yrs ≤ 50% of Total Debt)
18%
year 6 - 10
20%
15% 10 yrs +
next 5 yrs
year 6 - 10
28%
10 yrs +
Full Capacity* of All Government Funding Instruments
1,150,000 THB Mil.
Public Debt Management Office, Ministry of Finance, Kingdom of Thailand
LB 3 yr
150,000 THB Mil.
LB 5 yr
120,000 THB Mil.
LB 7 yr
80,000 THB Mil.
LB 10 yr
80,000 THB Mil.
LB 15 yr
60,000 THB Mil.
LB 20 yr
60,000 THB Mil.
LB 30 yr
30,000 THB Mil.
LB 50 yr
20,000 THB Mil.
50 30 20
Benchmark Bond
15
10
7 5
Benchmark Bond
~600,000 THB Mil. (52%)
Savings Bond
~100,000 THB Mil. (9%)
Promissory Note
~100,000 THB Mil. (9%)
Fixed Rate Promissory Note ~50,000 THB Mil. (4%)
3
Inflation-Linked Bond
~50,000 THB Mil. (4%)
Floating Rate Bond
~50,000 THB Mil. (4%) ~200,000 THB Mi (18%)
Bank Loan
Total
1,150,000 THB Mil. (100%)
* Under favorable market liquidity + using All funding instruments
(A) ATM = 9 yrs (B) Fixed : Float = 70 : 30 (C) Maturity Distribution Profile 50 - 30 - 20
FY2012 Maturity Profile of GOV’T Funding Instruments
Public Debt Management Office, Ministry of Finance, Kingdom of Thailand
50% (≤ 5 yrs)
Benchmark Bond
580,000 THB Mil 150,000
ATM Cost (Avg. past 3 yrs) Fixed : Float
350,000 THB Mil
10y 8m +5 bps 100 : 0
20% (≥ 11 yrs) 210,000 THB Mil
15 15
20 20
20,000
30,000
50,000
60,000
80,000
100,000
60,000
120,000
30% (6-10 yrs)
80,000
150,000
-
55
6
7
10 11 10
30 30
25
150,000
Fixed P/N 50,000
90,000
Bank Loan
10 11
ATM Cost (Avg. past 3 yrs) Fixed : Float 5,000
50,000
6
25,000
25,000
25,000
5
5,000
Savings Bond
25,000
100,000
FRB
10 11
15
20
25
6y 11m + 80 bps 65 : 35
30
40
15
20
25
Not-to-Collide with Benchmark Tenors
30
30,000
5,000
6
5,000
50,000
5
25,000
25,000
1
25,000
25,000
-
ILB
50,000
100,000
50,000
1
50,000 10,000
100,000
90,000
50,000
50,000
Alternative Instruments
P/N
50,000
150,000
50,000 10,000
100,000
50 50
40
30,000
3
1
40
50
18
For Further Information : Pimpen Ladpli
+66 2271 7999 ext. 5802
pimpen@pdmo.go.th
Director of Government Bond Market Development Division Acting Director Bond Market Development Bureau
Nattakarn Boonsri
+66 2271 7999 ext. 5803
nattakarn@pdmo.go.th
Director of Fund Management and Bond Market Infrastructure Development Division
Chatmanee Sinsiri
+66 2271 7999 ext. 5804
chatmanee@pdmo.go.th
Director of International Bond Market Policy Division
Pothirat Kijsriopak
+66 2271 7999 ext. 5812
pothirat@pdmo.go.th
+66 2271 7999 ext. 5806
ittipong@pdmo.go.th
Economist
Ittipong Kanluan Economist
Bond Market Development Bureau, Public Debt Management Office, Ministry of Finance, Kingdom of Thailand
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