May 2012
Linking CGIF & BAHT BOND to the Development of Bond Market A. Credit Guarantee and Investment Facility (CGIF) B. Baht – Denominated Bond in Thailand (Baht Bond)
Public Debt Restructuring and Domestic Bond Market Development Fund (PDDF) : An Overview A. PDDF Vision and Objective B. Organization Chart C. PDMO & PDDF Workflow D. PDDF Milestone and Investment Performance E. Looking Forward
Domestic Bond Market Development A. Evolution of Bond Market Development (1995 – Present) B. Building up of Benchmark Bond (FY2007 - FY2012) C. Bond Supply FY2012 + Funding Needs FY2012 - FY2015 D. Well-Developed Bond Market Improved Government Debt Profile Dramatically
For Lunch Talk 2012
Bond Market Development Bureau Public Debt Management Office Ministry of Finance
01
3 May 2012
Linking CGIF & BAHT BOND to the Development of Bond Market A. Credit Guarantee and Investment Facility (CGIF) • Objectives / Benefits • Functions • Why now? What’s next?
B. Baht – Denominated Bond in Thailand (Baht Bond) • Objectives / Benefits / Trade – off • Baht Bond Application Process • The Progress of Baht Bond Issuance and Rate of Approval
Linking CGIF & BAHT BOND to the Development of Bond Market Bond Market Development Bureau, Public Debt Management Office
Total Outstanding 7,710 BB
CGIF
BAHT BOND
as of 31 Mar 12
4 BB
70 BB
CGIF Baht Bond
1%
Corp Bond
19%
SOE Bond
6%
2012 2013 2014 2015 2016 2017 2018 2019
?
IBRD
Natural hedging
2005 2006 2007 2008 2009 2010 2011 2012
Inv’t Grade
Hana (18,000 m) CBA
DB
KEXIM SEK
BOT Bond
38%
Targeted industry
(17,200 m)
Woori
IBK
CABEI
(12,300 m) AFD
Citi
KDB
(11,553 m)
ING (10,000 m)
Why now? Thailand (PDMO) is a Board member Set criteria Select corporate
Presented by: Veeraya Julamont Laksika Tengpratip
GOVERNMENT Bond
(PDDF.)
36%
ADB (10,500 m)
Why now? Toward becoming regional hub Broadening investors’ base Increasing product choices
International Bond Market Policy Division Bond Market Development Bureau Public Debt Management Office 02
Linking CGIF & BAHT BOND to the Development of Bond Market Bond Market Development Bureau, Public Debt Management Office
CGIF
Total Outstanding 7,710 BB
BAHT BOND
as of 31 Mar 12
4 BB
70 BB
CGIF Baht Bond
1%
Corp Bond
19%
SOE Bond
6%
2012 2013 2014 2015 2016 2017 2018 2019
2005 2006 2007 2008 2009 2010 2011 2012 IBRD
Natural hedging
Hana
?
Inv’t Grade
(18,000 m) CBA
DB
KEXIM SEK
BOT Bond
38%
(17,200 m)
Woori
IBK
CABEI
Targeted industry
(12,300 m) AFD
Citi
KDB
(11,553 m)
ING (10,000 m)
Why now? Thailand (PDMO) is a Board member Set criteria Select corporate
03
GOVERNMENT Bond
(PDDF.)
36%
ADB (10,500 m)
Why now? Toward becoming regional hub Broadening investors’ base Increasing product choices
What is Asian Bond Market Initiative (ABMI) : How it relates to CGIF? Bond Market Development Bureau, Public Debt Management Office
Q2-09 : ASEAN + 3 discussion to establish
Task Force I Thailand China Task Force II Singapore Japan
Task ForceIII Malaysia Japan
Task ForceIV Philippines South Korea
SUPPLY DEMAND
CGIF to facilitate corporate local currency bond issuance within the region Q4-10 : CGIF Establishment Q3-12 : Fully operate Q4-04 : Establish Asian Bonds Online Website Q4-11 : Asian Bond Markets Summit
Q4-04 : Establish ASEAN Bond Market Forum
REGULATION
INFRASTRUCTURE
Q4-11 : Idea to establish Regional Bond Association
Q2-11 : Working Group hired Clearstream to conduct a study of regional linkage on regional Clearing & Settlement System
04
CGIF : Objectives Benefits Bond Market Development Bureau, Public Debt Management Office
Benefits
Objectives 1) To develop deep and liquid local currency and regional bond markets
2) To enable investment-grade ASEAN+3 issuers to access local currency bond markets and to promote the issuance of debt securities with longer term maturities to match the gestation of investment projects
An issuer’s cost saving
An efficient fund raising and a conformity with financial requirement of the business
A reduction of currency & Maturity Mismatch
Functions of CGIF Bond Market Development Bureau, Public Debt Management Office
05
1)
Guaranteeing bonds that are denominated in local currencies and issued by ASEAN+3 entities rated investment-grade
2)
Guaranteeing bonds that are not denominated in local currencies and issued by ASEAN+3 entities rated investment-grade, provided the entities concerned are naturally hedged in such currency
3)
Making investments for the development of the bond markets (no such investments shall be made until after the Meeting of Contributors has determined that CGIF is in a position to commence such operations); and
4)
Undertaking such other activities and providing such other services consistent with CGIF objectives
Prudential Limits Bond Market Development Bureau, Public Debt Management Office
Country Exposure Limit :
Within 20 of its capital
140m
Currency Exposure Limit :
Within 40 of its capital
280m
Sector Exposure Limit * :
Within
30 of country exposure
1. Agriculture and primary products
8. High tech
2. Aerospace/automobile/capital goods/metal
9. Insurance
3. Consumer/service sector
10. Leisure time/media
4. Energy and natural resources
11. Real Estate
5. Financial Institutions
12. Telecommunications
6. Forest and building products/homebuilders
13. Transportation
7. Healthcare/chemicals
14. Utility
42m
* To be effected when CGIF’s initial capital is increased or the maximum leverage ratio is raised by the Meeting of Contributors as per OP 208 and 209 • Potential Target Market • Expected Cost Reduction
Current Corporate Bond Market
Bond Market Development Bureau, Public Debt Management Office
By Business Sector
By Rating
Thai Corporate Bond (Issued during Jan 2011 – Mar 2012)
393,221.70 THB mln.
Others Trans
Agri Fin
6%
Bank
5% 5%
25%
6%
Food 8%
Energy Prop 13%
19%
AAA BBB 12% 6%
Target Industry rating ≥ BBB
AA
Cost Saving Currency Matching
34%
A
48%
ConMat 13%
bps
400
Average : 220.13 bps (From 2008 – Current) Average : 55.38 bps (From 2008 – Current)
Max : 347.71 bps
300
Max : 123.08 bps
BBB
Note: Excluding corporate bond with less than 1-yr issue term
3/30/2012
2/29/2012
1/31/2012
8/31/2011
7/29/2011
6/30/2011
5/31/2011
4/29/2011
Now : 156.74 bps
3/31/2011
2/28/2011
12/30/2010
11/30/2010
9/30/2010
10/29/2010
8/31/2010
7/30/2010
6/30/2010
5/31/2010
4/30/2010
3/31/2010
2/26/2010
1/29/2010
12/30/2009
11/30/2009
9/30/2009
10/31/2009
8/31/2009
7/31/2009
6/30/2009
5/29/2009
4/30/2009
3/31/2009
2/27/2009
1/30/2009
12/30/2008
11/28/2008
9/30/2008
10/31/2008
8/29/2008
AAA
12/30/2011
0
Now : 105.82 bps
A
Min : 97.95 bps
11/30/2011
100
9/30/2011
Min : 12.27 bps
10/31/2011
200
1/31/2011
500
(As of 31 March 2012) Source: Thai BMA
06
Establishment of CGIF : Contributors and Board of Directors Bond Market Development Bureau, Public Debt Management Office
Fund Contribution (Million USD)
Thailand
70
1
200
2
200
2
100
1
130
1
700
7 (+1 CEO)
ASEAN 10
ADB Trustee
Board of Directors (3-year term) (2010-2013)
Rotation of ASEAN 10 : 1. Thailand Indonesia Malaysia Philippines and Singapore 3-year term 2. Brunei Cambodia Laos Myanmar and Vietnam 3-year term
ASEAN by PDMO (Thailand) sits on 3 of board seats
Organizational Structure
Bond Market Development Bureau, Public Debt Management Office
BOARD OF DIRECTORS 1
2
3
4
5
6
7
8
CEO
(INTERNAL CONTROL AND RISK MANAGEMENT COMMITTEE : ICRMC)
(AUDIT COMMITTEE: AC)
Chairman CHIEF RISK OFFICER (CRO)
(GUARANTEE AND INVESTMENT COMMITTEE)
07
PROJECT
(NOMINATIONAND REMUNERATION COMMITTEE: NRC)
CGIF : Why NOW? What’s NEXT? Bond Market Development Bureau, Public Debt Management Office
Why NOW? BOARD OF DIRECTORS ICRMC
AUDIT COMMITTEE
NRC
CHIEF RISK OFFICER (CRO)
GUARANTEE AND INVESTMENT COMMITTEE)
Pilot Project
What’s NEXT? 1-on-1 with PDMO/Arranger (+ CGIF consultant) Nov
Announcing of CGIF Establishment
2010
Dec 11 –Feb12
July
CEO Selection
Drafting of Business Plan
2011
Market Research & Legal Survey (in targeted markets)
Market Dialogue (+ CGIF CEO)
5-6 project proposals from arrangers
May-Jun 12
Approval of Business Plan by BOD Pre-Marketing
July 12
Pilot Project
Expectation of 1st Deal
Selection process
2012
08
Linking CGIF & BAHT BOND to the Development of Bond Market Bond Market Development Bureau, Public Debt Management Office
CGIF
Total Outstanding 7,710 BB
BAHT BOND
as of 31 Mar 12
4 BB
70 BB
CGIF Baht Bond
1%
Corp Bond
19%
SOE Bond
6%
2012 2013 2014 2015 2016 2017 2018 2019
2005 2006 2007 2008 2009 2010 2011 2012 IBRD
Hana
Natural hedging
?
Inv’t Grade
(18,000 m) CBA
DB
KEXIM
SEK
BOT Bond
38%
(17,200 m)
Woori
IBK
CABEI
Targeted industry
(12,300 m) AFD
Citi
KDB
(11,553 m)
ING (10,000 m)
Why now? Thailand (PDMO) is a Board member Set criteria Select corporate
09
GOVERNMENT Bond
(PDDF.)
36%
ADB (10,500 m)
Why now? Toward becoming regional hub Broadening investors’ base Increasing product choices
Baht – Denominated Bond in Thailand (Baht Bond) Bond Market Development Bureau, Public Debt Management Office
OBJECTIVES
BENEFITS INVESTORS
• To develop domestic bond market by increasing the proportion of foreign issuers and variety of products. • To provide the opportunity for domestic investors to invest in a good quality bond
• To diversify source of investment • To reduce FX risk from the investment in foreign bonds
TRADE - OFF
ISSUERS
• To diversify the portfolio • To reduce the FX risk in THB currency (for foreign investors who would like to raise fund for investment in Thailand)
More variety of domestic bonds
Effect to Thai Corporate Issuers
Bond Market Development
10
Eligible Applicants for Baht Bond Bond Market Development Bureau, Public Debt Management Office
INTERNATIONAL FINANCIAL INSTITUTIONS (IFIs)
FOREIGN GOVERNMENTS (FGs)
such as ADB, WB, IFC and IMF
JURIDICAL ENTITIES
FINANCIAL INSTITUTION OF FGs
that have been established under foreign laws
(FIFGs) SPECIAL PURPOSE VEHICLE (SPV)*
* Remark: Special Purpose Vehicle (SPV) is established for the purpose of the securitization in which the originator is foreign government agency or organization and/or foreign juridical person.
Timeline for Baht Bond Application Process Bond Market Development Bureau, Public Debt Management Office
Nov
Dec
SUBMISSION
CONSIDERATION
Jan
Feb
1
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Issuance Period 9 months (Jan - Sep)
SUBMISSION
CONSIDERATION
2
Issuance Period 9 months (May - Jan)
SUBMISSION
CONSIDERATION
3
Issuance Period 9 months (Sep - May)
SUBMISSION
CONSIDERATION
1
Issuance Period 9 months (Jan - Sep)
APPLICATION PROCESS: 3 rounds per year (9-mth issuance period for each round)
* The approval period is based on the fiscal period under Thai government law (October – September)
11
The Progress of Baht Bond Issuance and Rate of Approval
Already reached the target of 15,000 THB mln. (as the minimum) within the first 3 months of year 2012 Bond Market Development Bureau, Public Debt Management Office
* Included clients in all credit rating levels
THB mln.
180,000 Lehman Crisis
150,000
120,000
167,000
90,000
101,400 84,000
60,000
58,300 49,400
32%
23
30,000 (2 issuers)
% (3 issuers)
38
7,000
2005
2006
(7 issuers)
(5 issuers)
26
% (2 issuers)
32,000
(2 issuers)
13,500
66,000
19%
33%
% (3 issuers)
(7 issuers)
11%
22,000 0
18%
5,374
18,088
12,000
2008
2009
2007
27,300
31,950
2010
2011
17,300 2012 (Q1)
Remark: The classification is based on the approval period
As of May 1, 2012
• International Credit Rating has “negative relationship” with Baht Bond issuance • Korean issuers are the majority of Baht Bond issuance (by amount)
Baht Bond Issuance By Rating
Bond Market Development Bureau, Public Debt Management Office
The Percentage of Baht Bond Issuance (By International Rating) 100%
% of the authorized amount
100% 100%
62% 50%
53% 46%
48%
47% 44%
43% 36%
33%
31%
29%
29%
25% 19% 0%
3%
7%
21%
11%
AAA
Woori
Hana
CABEI
Citi
KEXIM
KDB
IBK
ENBD
Cargil
ING
DB
CA-CIB
CBA
SEK
KfW
KBN
JBIC
AFD
ADB
IBRD
IFC
0%
A(International Rating)
Remarks: 44% of the total issued amount is issued by Korean issuers.
As of April 4, 2012
12
• To Enhance Our Cooperation • To Achieve Our Missions
Development Direction of Baht Bond
Bond Market Development Bureau, Public Debt Management Office
To Enhance our cooperation : 2012
Arranger BOT Deregulation of Swap Obligation
• Facilitating issuers & investors in Baht Bond • Providing market updates in one-on-one meetings
Extension of Approval Period
To Achieve our missions : 2015 Issued amount (per year)
2004 - 2011 between 5,000
Number of issuers (per year)
– 27,000 MB
between 2
Outstanding size
– 6 clients
2012 - 2015
minimum
15,000 MB
minimum
4 clients
3%
1%
(% share of BOND market capitalization)
Co-operation within PDMO Bond Market Development Bureau, Public Debt Management Office
Debt Management 2 Bureau
Bond Market Development Bureau
Policy and Planning Bureau
Law
1 Government Bond Market Development Division
2
3
Fund Management and Bond Market Infrastructure Development Division
International Bond Market Policy Division
Baht Bond • SOEs (THAI,BAAC, EGAT, PEA)
13
CGIF
• Credit Rating • IFIs (ADB, World Bank)
• Legal Advisor
• Legal Advisor
16 May 2012
Public Debt Restructuring and Domestic Bond Market Development Fund (PDDF) : An Overview A. PDDF Vision and Objective B. Organization Chart C. PDMO & PDDF Workflow D. PDDF Milestone and Investment Performance • 1st period LB11NA ( 31th Oct – 29th Nov 2011) • 2nd period SB129A ( 4th Nov 2011 – 31th Aug 2012) E. Looking Forward Fund Management and Bond Market Infrastructure Development Linking CGIF & BAHT BOND to the Development ofDivision Bond Market Total Outstanding 7,710 BB
Bond Market Development Bureau, Public Debt Management Office
Public Debt Management Office, Ministry of Finance, Kingdom of Thailand
CGIF
as of 31 Mar 12 7,710 BB Total Outstanding
BAHT BOND
as of 31 Mar 12
4 BB
70 BB
CGIF
PDDF . 2015 2016 2017 2018 2019 2012 2013 2014 .
Baht Bond
1%
Corp Bond
19%
SOE Bond
6%
.
MOF Outright PD as a 2007 2008 2009 2010 2011 2012 2005 2006 Market Maker and Contributor EBI ING (10,000m)
Cargill
Inv’t Natural Grade Active Debt Management hedging
CBA
?
And Bond Market Development
MOF Outright PD
CITI (9,100m)
SEK
38%
BOT Bond
AFD
KEXIM (7,700m)
IBK
Targeted industry
CABEI KDB
Why now?
GOVERNMENT Bond
GOVERNMENT Bond Thailand (PDMO) is a Board member Set criteria Select corporate
้
Why now?
36%
Toward becoming regional hub Broadening investors’ base Increasing product choices
Fund Management and Bond Market (PDDF.) Infrastructure Development Division
Presented by: Onpreeya Chungpanich Puttipong Kanna
ADB
2
Fund Management and Bond Market Infrastructure Development Division Bond Market Development Bureau Public Debt Management Office 14
PDDF Vision and Objective Bond Market Development Bureau, Public Debt Management Office
“Being Professional Asset Management Organization To Support Sustainable Public Debt Management and Bond Market Development� 1 To efficiently and effectively manage proceeds from debt
restructuring (Section 24/1) and issuance for bond market development (Section 25/1). 2. To minimize government cost of borrowing and default risk 3. To support sustainable bond market development
15
Public Debt Management Act Amendment B.E. 2551 : 1) Pre-funding & 2) Issuance for bond market development Bond Market Development Bureau, Public Debt Management Office
1 Debt Restructuring Section 24/1
• In a case that the amount of maturing debt is considered to be too large and / or inappropriate to be refinanced in one time on the same date, • MoF is allowed to Pre-fund the maturing debt one year in advance.
2 Bond Market Development Section 25/1
• In a case where the amount of borrowing required is considered to be insufficient for bond market development (e.g. balanced budget) • MoF can borrow for the purpose of bond market development through the issuance of benchmark bonds
16
Organization Chart Bond Market Development Bureau, Public Debt Management Office
Board of Directors Investment Committee (IC)
Fund Management
PDDF Manager Assistant Manager
Investment Policy and planning
Asset Manager 1. SCBAM 2. KASSET 3. KTAM
17
Internal audit
Compliance
Custodian : HSBC
Administration
PDMO and PDDF Workflow Bond Market Development Bureau, Public Debt Management Office
Matured debt 1
Over 55 Billion Baht
PDMO
Prefunding for Debt Restructuring
2 3 Debt Proceeds transferred to PDDF Repayment PDDF Investment Mandate Domestic markets • Gov / Gov G’teed securities • Highest rating fixed income securities • Reverse Repo
International markets • Major currencies • Highest rating fixed income securitis issued by Gov. / Gov. financial institutions, IFIs * Fully Hedge
4
Prefunding Interest Payment
PDDF
Investment Mandate Bond Market Development Bureau, Public Debt Management Office
Allocation
Investment Universe
Safe Asset >= 60 %
Domestic Markets • Fixed Income securities Issued and/or guaranteed by MOF •Reverse Repo (MoF’s securities as collateral) International Markets • Fixed Income securities issued and/or guaranteed by government’s financial Institutions & IFIs • Highest ratings and major currency * Fully Hedge
Other <= 40 %
•Other Fixed Income Securities (Corporate, SOEs) with highest rating
Deposit <= 10% of fund NAV 18
PDDF Milestone Bond Market Development Bureau, Public Debt Management Office
Selected and appointed 3 asset managers: KASSET, KTAM and SCBAM Selected and appointed 1 global custodian : HSBC Negotiated and signed GMRA & ISDA with 5 counterparties : KBANK, SCB, KTB, HSBC, SCBT Set up investment operating and monitoring system
Successfully managed prefunding proceeds for LB11NA . Nov 2011 . restructuring in
.
19
Investment Performance: 1st period LB11NA Restructuring Bond Market Development Bureau, Public Debt Management Office
• 31 Oct 2011 PDMO prefunded for LB11NA restructuring 39 Bilion Baht (P/N 5.5 yr, 3.69% ) Equally allocated proceeds to PDDF’s fund manager
• 29 Nov 2011 (total 29 days) PDDF total return 106.8 Million Baht (3.4473%) PDDF transferred principle and return to PDMO • Principal 39,000,000,000.00 Baht LB11NA repayment Interest • Return 106,502,097.06 Baht Prefunding payment
Investment Performance: 2nd period SB129A Restructuring Bond Market Development Bureau, Public Debt Management Office
• 4 Nov 2011 – 31 Aug 2012 (total 301 days) PDMO prefunded for SB129A restructuring Total 154 Billion Baht Proceeds transferred to PDDF as of 31 March 2012 80.443 Billion Baht Equally allocated proceeds to PDDF’s fund manager
• As of 31 Mar 2012 • NAV 81.05 Billion Baht (3.42%) 20
Investment Strategy Bond Market Development Bureau, Public Debt Management Office
1st Period : LB11NA 31th Oct – 29th Nov 2011
2nd period : SB129A 4th Nov 2011 – 31th Aug 2012 as of 31 Mar 12
.
. .
Gov/Gov G’teed Highest rating FI securities International FI securities Deposit Reverse Repo Hedging The roles of PDDF in supporting Bond Market Development Bond Market Development Bureau, Public Debt Management Office
Primary Market – Increase short-term liquidity – Constant supply of government securities – Financial institution and private sector have more alternative sources for short-term fund raising
Secondary market – Increase turnover of government bond and corporate bond – Promote Private Repo operation
21
Looking Forward Bond Market Development Bureau, Public Debt Management Office
• Continuous investment management and monitoring • Estimated prefunding 30-100 Billion Baht per year • Public Debt Management Act amendment • To enable more effective and efficient investment of PDDF • Preparation for bond market development borrowing
• To support PDMO in continuously promoting domestic bond market • Capacity building
• Human resource and technology
Maturity Profile of Outstanding Debt amount over 55 Billion baht Bond Market Development Bureau, Public Debt Management Office
Refinanced FIDF FIDF
250,000
Budget Deficit TKK
SB129A 200,000
150,000
LB145B LB11NA
100,000
LB155A LB15DA
LB133A SB147A
SB166A
LB196A LB183B LB17OA
LB21DA ILB217A LB213A
LB283A
50,000
-
2555
2556
Series1 89, 206 99,
2557
2558
121 80, 132
2559 113 82,
2560 -
2561
2562
75, 86, 99,
2563
2564
2565
69, 70, 81,
2566
2567
2568
2569
2570
2571 61,
update : 30 Apr 2012
22
PDMO and PDDF toward Active
Debt Management Bond Market Development Bureau, Public Debt Management Office
Prefunding planning and execution
Front Office Debt Management 1 Debt Management 2
. Bond Market Development Bureau
Reporting
.
Interest payment
.
Legal Advisory Internal Audit PR and Human Resource Development
23
Middle Office Policy & Planning
Back Office Payment Administration
Law Internal Audit HR & IT
29 May 2012
Domestic Bond Market Development 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
Thai Bond Market Has Grown Strongly for More Than a Decade % 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
Presented by: Pothirat Kijsriopak Ittipong Kanluan
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%
Government Bond Market Development Division Bond Market Development Bureau Public Debt Management Office 24
25
A. Evolution of Bond Market Development (1995 – Present) Bond Market Development Bureau, Public Debt Management Office
• The Thai Bond Market Has Developed Rapidly and Efficiently • Birth of Bonds • Innovation of Government Debt Securities (FY2007 – FY2013) • Equilibrium of Thai Bond Market • By Issuers • By Credit Rating • By Investors
26
Bond Market Developed Rapidlyand andEfficiently Efficiently The The ThaiThai Bond Market hasHas Developed Rapidly Bond Market Development Bureau, Public Debt Management Office
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
% of GDP
THB Trillion
67%
Pre-Crisis - Illiquid Bond Market - Absence of Benchmark Bond - Dominated by SoE’s Bonds
Development of Government Debt Securities Bond Market Development Bureau, Public Debt Management Office
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 27
2009
2010
2011
2012-2013
FY2007 – FY2013
Innovation of GOV’T Debt Securities
FY 2012-2013
FY 2011
FY 2007-10
Bond Market Development Bureau, Public Debt Management Office
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
(Public Debt Restructuring and Domestic Bond Market Development Fund)
CGIF
Baht Bond
(Credit Guarantee and Investment Facility)
Equilibrium of Thai Bond Market Bond Market Development Bureau, Public Debt Management Office
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)
28
29
B. Building up of Benchmark Bond (FY2007-FY2012) Bond Market Development Bureau, Public Debt Management Office
• 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
30
• 2007: PDMO Revised the Strategy of Benchmark Bond 2550 . 2007: PDMO Revised the Strategy of Benchmark Bond Issuance in 3 ways Issuance in 3 Ways ,
Bond Market Development Bureau, Public Debt Management Office
from Once a Week
I. Reduce Auction Frequency
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
8,00010,000
10,00012,000
15,00020,000
12,00015,000
6,000•Keep Our Word to get Investor Confidence for Plan
4,000 FY
8,000 FY
FY
FY
FY
FY
FY
F
Firm Committed Supply of Benchmark Bond Regardless of III. Increase Outstanding Size
Tenors: 3-5-7-10 yr 150,000200,000
Budget Uncertainty
Unit : THB Mil
80,000100,000
• Key Success 50,000Indicators
100,000120,000
100,000120,000
120,000150,000
80,000 40,000 • Trading Volume FY
FY FY • Turnover Ratio • Demand Concentration • Auction Price
FY
• Market’s Favorite Benchmark Bond • By Outstanding • By Trading Value • By On-the-run Benchmark Tenors
31
FY
FY
FY
F
Keep Our Word to get Investor Confidence for the Plan
Firm Committed Supply of Benchmark Bond Regardless of Budget uncertainty Bond Market Development Bureau, Public Debt Management Office
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 Bond Market Development Bureau, Public Debt Management Office
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
32
FY 2008-FY2011 Key Success Indicators FY 2008-FY2011 5 yr Benchmark Bond : Highest Secondary Trading Volume in Key Success Indicators every year (accounted for ¼ of total trading volume) Unit: % share of Market 5 yr Benchmark Trading Volume Bond : Highest Secondary Trading Volume in every year (accounted for ¼ of total trading volume) % % Unit: % share of Market Trading Volume % %
27
27%
9
20
20
28% 20%
FY
FY
FY
FY
7
% Top 10 Gov’t Bond Series – Accounted for 84% of all Gov’t Bond trading in Secondary Trading Volume FY FY FY FY FY Unit: % share of Market Trading Top 10 Volume Gov’t Bond Series – Accounted for 84% of all Gov’t Bond trading in Secondary Trading Volume %
84
Unit: % share of Market Trading Volume
75%
75 FY %
Bond Market Development Bureau, Public Debt Management Office
Bond Market Development Bureau, Public Debt Management Office
LB155A
5 yr Benchmark Bond : Higher Turnover Ratio LB133A
LB145B LB133A
3.1
1.5 LB133A
76%
76% FY
84%
LB15DA
2.8
LB145B
2.4
4.2 2.4
FY
2.8 FY
FY
FY USD FY FY FY FY Unit: Billion +3.2 bps +1.4 bps Well developed Benchmark Bond pays off : Even with greater size of issuance, the cost of funding is still at market rate
+1.2 bps
+1.2 bps
FY
LB15DA
Well developed Benchmark Bond pays off : Even with greater size of issuance, the cost of funding is still at market rate
14.7
7.5 FY08
15.0 +3.2 bps
12.8
14.7
7.5
77% FY
4.2
+1.4 bps
80% FY
FY
Unit: Billion USD
80% 77%
1.5
FY
LB155A
LB133A
3.1
FY
2. Turnover Ratio 4. Auction Price
1. Trading Volume 2. Turnover Ratio 5 yr Benchmark Bond : Higher Turnover Ratio 3. Demand Concentration 4. Auction Price
28
20%
79%
1. Trading Volume 3. Demand Concentration
15.0
12.8 -0.4 bps
FY09
FY10
FY11
-0.4 bps
FY
33
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)
Bond Market Development Bureau, Public Debt Management Office
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
FRB 50
2
30
9
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
A
5
LB
7
LB
30
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) Bond Market Development Bureau, Public Debt Management Office
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
34
C. Bond Supply FY2012 + Funding Needs FY2012-FY2015 Bond Market Development Bureau, Public Debt Management Office
• 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)
35
Annual Funding Needs Will Always Be around 600,000 THB Mil. Bond Market Development Bureau, Public Debt Management Office
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
Bond Market Development Bureau, Public Debt Management Office
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 36
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)
Bond Market Development Bureau, Public Debt Management Office
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
37
234,500
Funding Instruments : Local Bond Market VS Foreign Bond Markets Bond Market Development Bureau, Public Debt Management Office
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) Bond Market Development Bureau, Public Debt Management Office,
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
38
D. Well-Developed Bond Market Improved Government Debt Profile Bond Market Development Bureau, Public Debt Management Office
• 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
39
= 9y = 70 : 30 = 50-30-20
Public Debt Outstanding (as of Dec 2011) = 4.3 THB Trillion (40% of GDP) Bond Market Development Bureau, Public Debt Management Office
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
40
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
Bond Market Development Bureau, Public Debt Management Office 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
TTM
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
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
Bond Market Development Bureau, Public Debt Management Office
As of Dec 2007
Average-Time-to-Maturity LENGTHENED by 2 yrs
As of Dec 2011
ATM
7y 5m
ATM
5 y 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
41
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.
Bond Market Development Bureau, Public Debt Management Office
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
Bond Market Development Bureau, Public Debt Management Office
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
42
Bond Market Development Bureau Tel. FAX
Government Bond Market Development Division E-mail Pimpen Ladpli Natnontra Vilaidaraga Wiroj Prakeetawest Pothirat Kijsriopak Ittipong Kanluan Raveewan Buanung Anong Chaithong
02-271-7999 02-357-3576
Extension
pimpen@pdmo.go.th natnontra@pdmo.go.th wiroj@pdmo.go.th pothirat@pdmo.go.th ittipong@pdmo.go.th raveewan@pdmo.go.th anong@pdmo.go.th
5802 5820 5819 5812 5806 5801 5817
Fund Management and Bond Market Infrastructure Development Division E-mail Nattakarn Boonsri Onpreeya Chungpanich Puttipong Kanna Taninrat Wongsuppapat Wantanee Po-ngam
Extension
nattakarn@pdmo.go.th onpreeya@pdmo.go.th puttipong@pdmo.go.th taninrat@pdmo.go.th wanthanee@pdmo.go.th
5803 5805 5808 5811 5814
International Bond Market Policy Division E-mail Chatmanee Sinsiri Busabong Tantamaneerat Veeraya Julamont Laksika Tengpratip Thatree Intharasut
เ็ ม เ ่
Extension
chatmanee@pdmo.go.th busabong@pdmo.go.th veeraya@pdmo.go.th laksika@pdmo.go.th thatree@pdmo.go.th
ชี
5804 5818 5807 5813 5815
ี้ เ ศ
่
ณ