KOT Bond Market Booklet Q1 FY2017 by pdmo pdmo

KINGDOM OF THAILAND BOND MARKET FINANCING THAILAND’S FUTURE & CONNECTING ASEAN

Progress Update

» Committing to FY2017 Fund Raising Plan » GOVT Bond Auction Results » T-Bill Plan Q1/FY2017 » Bond Switching Transaction for LB176A in FY2016 Result

» GOVT Bond Auction Schedule Q1/FY2017 » SOE Bond Auction Schedule Q1/FY2017 » PDMO Bond Calendar FY2017 Basic & Essentials

» Bond Market Development Strategy » Public Debt Outstanding and Its Composition » Total Domestic Public Debt » Bond Market Capitalization and Its Composition » Supporting Inclusive Growth Through ASEAN Bond Market Integration

Non-Resident Holding in Domestic Bond

PUBLIC DEBT MANAGEMENT OFFICE MINISTRY OF FINANCE KINGDOM OF THAILAND

Quick Facts Public Debt Outstanding (as of July 2016)

5,958,103 THB Mil. (42.89 % of GDP)

Well-Developed Bond Market Improved GOVT Direct Debt Profile Dramatically (as of July 2016) » Average-Time-to-Maturity (ATM) 12yrs 1mth » Average Cost 3.82% » Well-Balanced Fixed : Floating Ratio 89 : 11 » Well-Distributed Maturity Profile 33:20:47 (TTM<5 : 6-10 : >10yrs)

Bond Market Capitalization (as of September 2016)

10,611,220 THB Mil. (75% of GDP)     

GOVT Bond 38% of total Bond Market outstanding BOT Bond 28% SOEs Bond 8% Corp Bond 25% Baht Bond 1%

Baht Bond Outstanding and its Market Share (as of September 2016)

67,499 THB Mil. (1% of Bond Outstanding)

Non-Resident Holding in Domestic Bond (as of September 2016) » Annual Capital Flow (YTD) 159,554 THB Mil.  GOVT Bond : 38,434 THB Mil.  BOT Bond :

» NR Holding in THB Bond  GOVT Bond :  BOT Bond :  Others :

19 22

121,120 THB Mil.

732,436 THB Mil. (6.9% of Thai Bond Market Cap.) 592,966 THB Mil. (14.5% of GOVT Bond Outstanding) 138,591 THB Mil. (4.7% of BOT Bond Outstanding) 879 THB Mil.

Progress Update  Total Fund Raising Plan FY2017

 GOVT Bond Auction Results  T-Bills Plan Q1/FY2017  Bond Switching Transaction for LB176A in FY2016 Result  GOVT Bond Auction Schedule Q1 /FY2017  SOE Bond Auction Schedule Q1/FY2017

 PDMO Bond Calendar FY2017

2016 - 2022

Government Funding Needs

700 - 950 THB Bil. per Year

957,xxx 86MB

2,XXXMB

New Borrowing 350 - 450 THB Bil.

Per year

Insurance Decree

3XXMB

4,XXXMB 38,XXXMB 59,XXXMB 38,XXXMB

Infr

THB mil.

5x,xxxMB

Substitution for foreign currency bond On-Lending

390,000

Deficit Bill 58,940

(2016-2022) 200,666

344,084

300,000

250,000

390,000

114,286

112,708

GOVT 140,192

Bond Switching

50,000

Rollover 350 - 500 THB Bil.

Per year (2016-2022)

-0-

52,000

149,209

231,000

307,945

252,898

2xx,xxx

177,545

453,367

3xx,xxx

102,059

101,800

37,900

109,000

-0-

FY2017

FY2018F

FY2019F

FY2020F

FY2021F

FY2022F

286,104

FIDF FY 2017

113,014

340,122

191,095

129,124

59,374

104,236

FY2011

FY2012

FY2013

FY2014

FY2015F

FY2016

GOVT Fund Raising Plan Insurance Decree

440,XXX MB

New Borrowing

On-Lending

Roll Over 517,XXX MB

957,xxx MB -Tentative-

50,xxx

390,xxx

Deficit

Promissory Notes R-Bill, And Others

Savings Bond Rollover SOEs Debt

Rollover Govt Debt

15,xxx

189,xxx

Loan Bond 5-10-15-20-30-50 yrs

Rollover FIDF Debt By Bills

Remark :

FY2017F

313,xxx

550,xxx

By Instruments

1. Exclude external funding for both new borrowing and rollover debt with amount of 71,xxx 2. Exclude T-Bill rollover debt

Government Bond Supply Keep Increasing Since 2009 THB mil.

Amount of Benchmark Bond to Actual Fund Raising (FY2009 – FY2017)

1,000,000 Others

Benchmark Bond

750,000

9% 1%

-11%

500,000

14%

37% 2% 10% 49% 250,000

ALL FY2017

Benchmark Bond is approximately 550 Bil.

60% of FY2017 Funding Needs 957 Bil.

THB Mil.

500,000 Benchmark Bond

400,000

Tenors

Symbol

Issuance Size

5-yrs

LB226A

140,000 – 160,000

Total

10-yrs

LB26DA

90,000 – 100,000

15-yrs

LB316A

70,000 – 80,000

20-yrs

LB366A

60,000 – 70,000

30-yrs

LB466A

60,000 – 70,000

50-yrs

LB666A

80,000 – 90,000

550,xxxMil.

Total Benchmark Bonds

550,xxx MB

300,000

Top-up

TTM

LB666A LB666A

LB616A

LB466A LB466A

LB446A

LBA37DA LB383A LB396A LB406A LB416A

LB366A LB366A

ILB353A

LB316A LB316A LB326A

LB16NA LB171A LB175A LB176A LB17OA LB183A LB183B LB191A LB193A LB196A LB198A LB19DA LB206A LB213A LB214A ILB217A LB21DA LB226A LB226A LB22NA LB233A LB236A LB244A LB24DA LB25DA LB267A LB26DA LB26DA LB27DA ILB283A LB283A LB296A

Top-up

100,000

Top-up

50 15

Top-up

200,000

FY2016 – Present GOVT Bond Auction Results Classified by Auction Schedule THB Mil.

100,000

bps

75,000

50,000

25,000

T-1= 00

-25,000

-10

-50,000

-20

-75,000

-30

-100,000

Oct-15

Nov-15

Dec-15

Jan-16

Short-term Benchmark Bond (<10 yrs) Long-term Benchmark Bond (>10 yrs)

Feb-16

Mar-16

Apr-16

May-16

Jun-16

Jul-16

Aug-16

-40

Sep-16

Max. (bps) Min. (bps) Average Accepted Yield

FY2016 – Present GOVT Bond Auction Results Classified by Tenor THB Mil.

100,000

Benchmark Bond 5 – 10yr 5-Yr

10-Yr

Benchmark Bond 15 – 50yr 15-Yr

30-Yr

bps

50-Yr

75,000

50,000

25,000

T-1= 00

-25,000

-10

-50,000

-20

-75,000

-30

-100,000

-40 Short-term Benchmark Bond (<10 yrs) Long-term Benchmark Bond (>10 yrs)

20-Yr

Max. (bps) Min. (bps) Average Accepted Yield

FY2016

 Low Cost of Funding  High Volume of Short-term Demand

T-Bill Auction Result

Basis Points

THB Mil. 75,000

60,000

Q4 8

45,000 5 30,000 3

15,000

2.4

T-1= 00

0.7 -0.4

-0.6 -0.8

-1.2

-15,000

2.0 1.3

0.9 0.4 0.2 0.1 0.00.1 -0.2 -0.6 -0.9 -1.0 -2.4

-2.1

-2.5

0.2

-2.6

-3.1

-30,000

-1.5 -1.6

-2.5 -3.0

-1.8 -2.3

0.1

-0.1 -0.5

-1.1

-1.4

-1.5

-0.1 -0.2

-3

-2.2 -2.4

-2.6

-3.8 -4.4

-45,000

-1.5 -1.7

-1.9 -1.8 -1.9 -2.0 -2.3 -2.6 -2.7 -3.2

0.9

0.6 0.3

-5.5

-5

-4.3

-4.4 -4.9 -5.2 -5.4

-5.0

-4.8

-5.0 -5.4

-8

T-bill 3 month

-60,000

T-bill 6 months R-bill 3/6 months

T-bill (Allocated Amount) Participated Amount (Excess Demand) -8.8 Spread [AAY-Yield(T-1)]

-8.4

-75,000

-10 Oct-15

Nov-15

Dec-15

Jan-16

Feb-16

May-16

Jun-16

Jul-16

Aug-16

  =

: 218,683 : :

Sep-16

162,000 20 56,682

(Bond Switching) (

Source Bond Destination Bonds Switched Amount

LB206A LB2 A LB DA LBA37DA LB666A

300,000

LB176A

250,000

Apr-16

• • •

LB176A 350,000

Mar-16

-56,682

3 5 10

)

, , ,

.3 100

200,000

150,000

100,000

50,000

LB666A

LB616A

LB466A

LB446A

LB416A

LB406A

LB396A

LB383A

LB366A

LBA37DA

LB326A

LB316A

LB296A

LB27DA

ILB283A LB283A

LB267A LB26DA

LB25DA

LB244A LB24DA

LB233A LB236A

LB226A LB22NA

LB213A LB214A ILB217A LB21DA

LB206A

LB193A LB196A LB198A LB19DA

LB183A LB183B LB191A

LB175A LB176A LB17OA

LB16NA LB171A

20,000

15,000

1. LB316A = 2. LB666A = 3. LB226A = (Greenshoe Option) 4. LB366A = 5. LB26DA = 6. LB466A =

MOF Outright PD

17-Jun-2022

1.875%

Coupon

Maturity Date

50,000

Total

28 December 2016

21 December 2016

14 December 2016

Re-open

Re-open Re-open Re-open

17-Dec-2026

2.125%

16,000

Re-open

20-Jun-2031

3.65%

30,000

17-Jun-2036

3.40%

17-Jun-2046

2.875%

13,000

17-Jun-2066

4.00%

28,000

159,000

14,000

24,000

15,000

13,000

30 November 2016

7 December 2016

23 November 2016

12,000

14,000

12,000

36,000

14,000

16,000 13,000

Total

16 November 2016

16,000

14,000

LB666A 50-yrs

12,000

LB466A 30-yrs

9 November 2016

2 November 2016

26 October 2016

19 October 2016

30,000

LB366A 20-yrs

15,000

LB316A 15-yrs

12 October 2016

LB26DA 10-yrs

LB226A 5-yrs

5 October 2016

Auction Date

Auction Schedule for Q2/FY2016 Q1/FY2017 GOVTGovernment BondBondAuction Schedule (Oct â&#x20AC;&#x201C; Dec 16)

ที่มา : สานักจัดการหนี้ 2 สานักงานบริหารหนี้สาธารณะ

Quarter 1 Month Week-Date Wk. 38 20 Sep Wk. 39 22 27 29 Wk. 1 4 6 Wk. 2 11 Oct Wk. 3 13 18 20 Wk. 4 25 27 Wk. 5 1 3 Wk. 6 8 10 Wk. 7 15 Nov 17 Wk. 8 22 24 Wk. 9 29 1 Wk. 10 6 8 Wk. 11 13 Dec Wk. 12 15 20 22 Wk. 13 27 29 รวม

2,698

BMTA GG 2,698

Gauranteed and Serviced by GOVT

3,565

GG : Gov. Guarantee

16,595

SRT GG 9,000

BMTA GG 3,515

Not Guaranteed by GOVT

Sources

4,400

MPC

SRT GG 4,080

SRT GG 3,565

NG : Non Guarantee

39,701

BAAC GG 36,080

SRT GG 3,621

Term/Loan (month) 12 18 24 BMTA GG 4,400

Total 0

66,959

9,000

3,515

H.M. the King's Birthday

BMTA GG/S 4,657

Auction Condition

Next 5 working days

Auction Bond

Next 5 working days (since pricing date)

Syndication Bond

Thursday

Tuesday

Date

MPC

Borrowing

Total

New borrowing for investment

New borrwing for capital substitution

Rollover

Substitution Day for Constitiution Day

93,616

75,143 13,117 5,356

Amount

80% 14% 6% 100%

26,657

4,657

MPC

22,000

2,698

36,080

4,080

3,621 0

22,000

Bond (year) 7 10

Substitution Day for Chulalongkorn Memorial Day BAAC GGLB197A or GGLB317A GG/S

3 0

3,565

4,400

Total

93,616

9,000

3,515

4,657

2,698

36,080

26,080

3,621

3,565

4,400

Grand total (Thai Mil.)

Q1/FY2017 SOE Bond Auction Schedule (Oct – Dec 16)

Quarter 2

Quarter 1

Mar 2017

Feb 2017

Jan 2017

Dec 2016

Nov 2016

Oct 2016

Auction T-bill

Substitution Day for Makha Bucha Day

Auction T-bill

Substitution Day for New Year's Day

Auction T-bill

Substitution Day for Constitiution Day

H.M. the King's Birthday

Auction T-bill

Baht Bond 1/FY2017

Auction T-bill

Substitution Day for Chulalongkorn Memorial Day

Auction T-bill

Mon

Quarterly PD Market Dialogue

Baht Bond 2/FY2017

Tue

Action LB666A (50Y) : 10,000MB

Action LB226A (5Y) : 24,000MB

Action LB316A (15Y) : 15,000MB

Action LB466A (30Y) : 13,000MB

Action LB26DA (10Y) : 16,000MB

Action LB366A (20Y) : 12,000MB

Action LB226A (5Y) : 30,000MB

Action LB666A (50Y) : 14,000MB

Action LB316A (15Y) : 15,000MB

Wed

MOF Outright PD Committee

Thu

MOF Outright PD Committee : Quarterly PD's Evalution

Quarterly PD Market Dialogue

PDMO Bond Calendar FY 2017

Auction T-bill

Fri

Sat Sun 1

Quarter 3

Quarter 4

Sep 2017

Aug 2017

Jul 2017

Jun 2017

May 2017

Apr 2017

Auction T-bill

Substitution Day for H.M. The Queen's Birthday

Auction T-bill

Substitution Day for Asarnha Bucha Day

Auction T-bill

National *Labour Day

Auction T-bill

First Day of submission for MOF Outright PD's Application

Auction T-bill

MOF Outright PD Committee : Quarterly PD's Evalution

Visakha Bucha Day

Songkran Festival Day

Chakri Memorial Day

Annual PDMO-Market Dialogue + MOF Awards

MOF Outright PD Committee : Final Review

Baht Bond 3/FY2017

Quarterly PD Market Dialogue

Royal Ploughing Ceremony Day

Coronation Day

Last Day of submission for MOF Outright PD's Application

Songkran Festival Day

Remark : Royal Ploughing Ceremony Day- waiting for an annoucement This schedule is subject to change without prior notice.

Peers Comparison

BOND market capitalization Source : Asian Bond online (ADB)

BOND mkt. cap : GDP

221%

Government BOND Yield Curve

% Yield

Public Sector (GOVT + CB + SOE) Private Sector

200%

130%

150%

98%

74%

100%

65%

Hundreds

% : GDP 250%

10%

Indonesia

50%

23%

Vietnam 6%

Philippines Malaysia

Share of PUBLIC sectorâ&#x20AC;&#x2122;s Bond to Total BOND mkt. cap. % : BOND mkt. cap.

USD Billions 300

98%

100% 86%

China 2.81%

83% 74%

58%

GOVT 117

50%

150

Japan 0%

SOE 22

USD Billions

BOT 78

Philippines

Thailand

161

136

-1%

Te n o r

0 Vietnam

Indonesia

Singapore

Korea

55%

USD Billions

125

1.83%

3.26%

Thailand

USA

2.18%

Singapore

Malaysia

As of September 30th ,2016

Government BOND Yield Matrix

ASEAN & Peers

As of September 30th ,2016

6m Japan

1 yr

2 yr

3 yr

4 yr

5 yr

6 yr

7 yr

8 yr

9 yr

10 yr

20 yr

30 yr

40 yr

50 yr

USA Singapore Korea Thailand China Philippines Malaysia Vietnam

Indonesia Brunei Cambodia Laos Myanmar

below 1% -

over 4%

no data

Basic & Essentials  Bond Market Development Strategy  Public Debt Outstanding  Total Domestic Public Debt  Bond Market Capitalization  Liquidity & Secondary Market Trading  Supporting Inclusive Growth Through ASEAN Bond Market Integration  Non-Resident Holding in Domestic Bond

 Funding Infrastructure Investment  Connecting ASEAN

Domestic Bond Market in Transition

Funding Infrastructure Investment Connecting ASEAN (2013 - 2016) FY2017 Highlights

Market Deepening Oriented (2010 - 2012)

Sustainable Source of Fund

Water Decree (350,000 THB Mil.)

Full Funding Capacity : 1,200,000 THB Mil.

Thai Khem Khang (350,000 THB Mil.)

1,900,000 THB Mil. Long-Term Infrastructure Inv’t

Baht Bond (Foreign Issuers Bond)

Baht Bond (CLMV) Credit Guarantee Investment Facility (CGIF)

Regional Connectivity / AEC

Foreign Currency Bond (Plan)

Debt Folio Enhancement

ATM Lengthened

Well-Distributed Investor Base

Cost Lowered

Well-Balanced Fixed-Floating Ratio

FIDF Decree Passed = 70,000 THB Mil. Fiscal Space

Well-Distributed Maturity Profile / Bond Switching Bond Switching on E-Auction

Appointed 14 MOF-Outright PD

Market Infrastructure

Strengthening PD system

Activated Public Debt Management Fund

(Exclusivity, League Table, Greenshoes Option)

STRIPS Bond Inaugural 10-yr Inflation-Linked Bond (10-yr)

Innovation / Product Development

Saving Bond Online

Long-term Fixed Promissory Notes (25-35-45-yr)

Super- Size Inaugural 25-yr Back-End Amortized Bond

Electronic Retail Savings Bond (3-5-yr)

Annual PDMO Market Dialogue Annual PDMO Market Dialogue

Market Consultation

Quarterly PDMO one-on-group MOF Outright PD Dialogue

Quarterly PDMO one-on-one PD Dialogue

Building Yield Curve / Enhancing Liquidity

15 10 7 5 3

Monthly PDMO one-on-one MOF Outright PD Dialogue

Liquidity-Oriented

300,000 MB

8 Tenors of Benchmark Bonds

150,000 MB Outstanding Amount

3 5 7

Equilibrium of Domestic Bond Market Issuers

• 74 percent of Thailand’s debt securities are issued by Government, Bank of Thailand and State-Owned Enterprises

Credit Rating

• 98 percent of Thailand’s debt securities are classified as Investment Grade

Investors

• Thailand’s government debt securities are held by a wide group of investor types

Domestic Bond Market (Classified by Issuers)

Domestic Bond Market (Classified by Credit Rating)

Baht Bond 1%

Corp Bond

25%

Government

BBB

A % 12

13% 12

38%

Corp Bond BOT

38%

28 BOT% 29% Total of 10.6 THB Trillion

Source : ThaiBMA (End of Sep 2016)

Government Government

Government 38%

Government

248%% SOEs

Mutual Funds 2%

Household 3% Financial Institution Bot 4% 6%

2% Non-rated

SOEs SOEs 8% 8%

Government Debt Securities (Classified by Types of Investors)

39% 38%

BOT BOT BOT

28% 2928 % % Total of 10.6 THB Trillion

Source : ThaiBMA (End of Sep 2016)

Other 1%

Non- profit organization 1%

Contractual

NR 14%

Funds 27%

Depository Corporation 14%

Depository Insurance NR Corporation Company 14% 28%

31%

Total of 4.4 THB Trillion

Source : BOT (End of Aug 2016)

Public Debt Outstanding (as of July 2016) = 5.96 THB Trillion (42.89% of GDP) Components of Public Debt

Units : THB Mil.

1. Government Debt (excluded FIDF) 2. Government Debt (for FIDF) 3. Non-Financial Sate Enterprise Debt

Autonomous Agency Debt

0.41%

4. Special Financial Institutions Guaranteed Debt

Special Financial Institutions Guaranteed Debt

5. Autonomous Agency Debt

24,472.17 THB Mil.

8.64

% 514,778.46 THB Mil.

Public Debt Outstanding *including External Debt

Non-Financial State Enterprise Debt

17.07% 1,016,826.65 THB Mil.

GOVT Debt 57.72% 3,439,391 THB Mil.

GOVT Debt (for FIDF)

16.16% 962,634.80 THB Mil.

Source : Information Technology Centre, PDMO

Portion of Public Debt Serviced by The Government Public Debt Components “All”

Public Debt Components “serviced by the government ”

5.96 THB Trillion

3.87 THB Trillion

Autonomous Agency Debt

Special Financial Institutions Guaranteed Debt

0.41% 24,472.17 THB Mil.

8.64% 514,778.46 THB Mil.

Non-Financial State Enterprise Debt

17.07% 1,016,826.65 THB Mil.

Special Financial Institutions Guaranteed Debt

serviced by the government

Autonomous Agency Debt

serviced by the government 0.03%

7.34%

GOVT Debt 57.72%

GOVT Debt 53.31 % % 56.79

3,439,391 THB Mil.

GOVT Debt (for FIDF)

16.16% Non-Financial State Enterprise Debt

962,634.80 THB Mil.

As of July 2016

100%

serviced by the government

0.84%

65%

Total Domestic Public Debt = 5.61* THB Trillion Assumptions : 6 months BIBOR = 1.72%, 6 months Fixed Deposit Rate = 1.225%, Inflation = 0.1%

Non-financial SOEs

400,000

Note : * Not included External Debt

financial SOEs

As of Jul 2016

 ATM  Avg. Cost  Fixed : Floating  Callable

Autonomous-Agencies

SOE Debt (Serviced by GOVT) = 489,012 THB Mil.

300,000 200,000

Excluding Not serviced by GOVT 816,693 THB Mil. External SOE debt (Serviced by GOVT) 62,540 THB Mil. External SOE debt (Not-Serviced by GOVT) 186,030 THB Mil.

TTM Fiscal Year

32,000

2,600

14,500

10,400 400 2,987 22,300 25,000

6,857

28,000

160,055

100,000

132,814

11,926 8,642

10,000

FIDF 1

400,000

155,900

Budget Deficit

T-Bill

400,000 30,000

= 3,345,287

Next 5 yrs

6-10 yrs

ATM Avg. Cost Fixed : Floating Callable

10 yrs +

= 12yrs 1mth = 3.82% = 89: 11 = 6%

24,700

Maturity Profile

13,000

33% 165,902

47% 20%

10,000 39,000

27,600

29,400

20,000 5,500

128,057

196,379

3,900

95,936

2,400

33,581

35,000

214,252

12,000

57,900

59,000

239,798

88,320

59,141

53,664

22,688

2,450 76,700 18,900

286,104

27,000

164,501

176,164

16,000 10,302

146,713

10,115

100,000

Water RW DPL Ext. Guaranteed Debt    (exclude FIDF) THB Mil.  (Excluding foreign debt 94,104 THB mil. )

3,200

100,872

10,000

1,381 9,000 13,740 12,085

431,367

40,000

10,000

TTM Fiscal Year

On-lending Loan

20,000

5,344

TKK

GOVT Direct Debt

3,000

200,000

11%

20% 0%

300,000

= 3yrs 10mths = 3.92% = 94: 6 = 3% Maturity Profile

40%

TTM Fiscal Year

22,000

10 yrs +

32%

60%

74,000 28,198

126,850

57%

71,000

25,000

40,000 69,000

77,059

137,219

101,800

25,000

10%

6-10 yrs

 ATM  Avg. Cost  Fixed : Floating  Callable

FIDF 3

GOVT Debt (for FIDF) = 962,635 THB Mil.

300,000

100,000

Maturity Profile

81%

Next 5 yrs

200,000

= 2yrs 9mths = 2.85% = 69: 31 = 32%

10,000

Next 5 yrs

(1) (2) (3) (4)

Well-Developed Bond Market Improved GOV’T Direct Debt Profile Dramatically

6-10 yrs

10 yrs +

ATM Lengthened Cost Lowered Well-Balanced Fixed-Float Ratio Well-Distributed Maturity Profile

Note : Government Direct Debt = 3,345,287 THB Mil. (exclude FIDF and external debt)

As of Dec 2007

ATM

Average-Time-to-Maturity LENGTHENED by 6yrs 8mths

Avg. Cost LOWERED by 66 bps.

As of Jul 2016

12yrs 1mth

ATM

5yrs 3mths

Avg. cost

4.5%

(While ATM Lengthened by 6yrs 1 mth)

Avg. cost

3.82% Floating

Well-Balanced Fixed/Floating Ratio (Target : Fixed/Float ratio = 85 : 15)

10%

Fixed

90%

89%

54%

Well-Distributed Maturity Profile (Maturing Debt in the next 5 yrs is less than 50% of Total Debt)

Floating

28%

Next55yrs yrs year 6-10 yrs next 6 -10

18% 10 10 yrs yrs ++

33%

Next 5 yrs

11%

47% 20%

6-10 yrs

10 yrs +

Bond Market Cap.= 10.6 THB Trillion ($305 Bil.)*

GOVT Bond = 4.0 THB Trillion ($117 Bil.)*

% Share of GDP 140%

Domestic Bond Market Classified by Issuer

128%

120%

106% 100%

Baht Bond 1%

99%

80%

Corp Bond 25%

75%

2,682,581THB Mil

60% 24% 40%

SOEs Bond 8%

20%

12%

BOT Bond 28%

Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16

822,291 THB Mil.

Asian Fin. Crisis

Bank Loan /GDP

Equity/GDP

2,961,302 THB Mil.

Bond Market / GDP

Maturity Profile BOT vs GOVT Bond

Gov't Bond 38%

BOT ATM = 7mths GOVT ATM = 10yrs 8mths *As of Sep 2016

10%

78%

4,078,547 THB Mil.

18%

≤1

22%

12%

1<yr≤3

3<yr≤5

24%

36%

5<yr≤10

10<yr≤50

As of 30 Sep, 2016

*Source: BOT Exchange rate as of Sep 2016

Constantly Loan Bond Issuance Creates an Effective Government Bond Yield Curve % 4.00 3.75 3.50 3.25 3.00

Thailand’s Loan Bonds (LBs) weighting in international indices

On-the-run Benchmark Bond in FY2017 Tenor 3 5 7 10 15 20 30 50

Symbol LB226A LB26DA LB316A LB366A LB466A LB666A

GBI-EM Global JP Morgan

Remark Included in GBI Index Included in GBI Index -

iBoxx Asia ex Japan Markit

8.0%

Asian Local Markets HSBC

9.6%

8.0%

Last Update : JPMorgan and Markit as end of September 2016 HSBC as end of June 2016

50 30

2.75 2.50

2.25

2.00

1.75 1.50 1.25 1.00 0.75

3 Benchmark Bond Objectives - 8 tenors of Benchmark Bond (3 5 7 10 15 20 30 and 50 years) build the benchmark yield curve as a reference rate for SOEs and private sectors - Main Government’s financing instrument - Build liquidity in the secondary market

0.50

TTM

Source: ThaiBMA Government Bond Yield Curve (end of September 2016)

Tier 1 > 100,000 THB Mil. in Size (86% of Trading Volume)

Total GOVT Bond = 42 Series (End of September 2016)

Tier 2 > 50,000 THB Mil. in Size

(11% of Trading Volume)

Outstanding (THB Mil.)

Tier 1: >100,000MB

550,000

FY2015 Market Share of Trading Volume in Secondary Market Tier 1 Tier 2

(12 Series) 500,000

450,000

86%

11%

Outstanding size (THB Mil.)

400,000

100

350,000

Tier 2: 50,000 – 100,000MB

300,000

(16 Series)

250,000

200,000

150,000 100,000 100,000

50 5 15

50,000

30 LB383A

LB396A

LB466A

LB406A

LB183A

LB22NA

LB244A

LB26DA

LB214A

LB19DA

LB171A

LB175A

LB267A

LB24DA

LB233A

LB366A

LB198A

LB316A

LB16NA

LB226A

LB283A

LB191A

LB326A

LB213A

LB193A

LB27DA

LB17OA

LB183B

LB666A

LB416A

ILB217A

LB446A

ILB283A

LB176A

LB616A

LB206A

LB236A

LB25DA

LB296A

LBA37DA

LB21DA

LB196A

FY 2016 on-the-run Benchmark Bond

Source : ThaiBMA

GBI-EM Thailand – JPMCB0

FY2016 Secondary Trading Volume

9 of 10 most Trading Volume have outstanding size over 100 bil.

As of Semtember 2016

Outstanding (THB Mil.)

Trading Volume Current Outstanding ≥ THB 100 Bil. Current Outstanding = THB 50-100 Bil. Current Outstanding ≤ THB 50 Bil.

10 GOVT Bond series are included in JPMCB Index 2 of which are on-the-run Benchmark Bond (5-20-yr)

550,000

FY 2016 on-the-run Benchmark Bond

500,000

550,000 500,000

GBI-EM Thailand - JPMCB Trading Volume

450,000

400,000

350,000

300,000

250,000

200,000

150,000

20 5

100,000 100,000

100,000

10 50,000

50,000

Source : ThaiBMA

LB396A

LB383A

LB183A

LB233A

LB283A

LB416A

LB267A

LB22NA

LB244A

LB214A

LB406A

LB19DA

LB616A

LB24DA

LB213A

LB326A

LB171A

LB175A

LB198A

LB16NA

LB27DA

LB466A

LB316A

LB17OA

LBA37DA

LB193A

LB183B

LB666A

LB191A

ILB283A

LB446A

LB26DA

ILB217A

LB226A

LB366A

LB236A

LB296A

LB176A

LB25DA

LB196A

LB206A

0 LB21DA

Linking BAHT BOND to the Development of Bond Market Total Outstanding 10,611,220 THB Mil.

BAHT BOND

(As of 30th September , 2016)

Baht Bond 1%

(Foreign Issuers Bond)

THB 66,499 Mil.

Corp Bond 25% SOEs Bond 8% MHBK

BOT Bond 28%

CABEI KEXIM

WOORI EDLGEN

MOFL

GOVT Bond 38% What next? (PDDF.)

 Broadening Issuer Base : AEC  Becoming bond market leader of the region

Baht Bond’s Maturity Profile (Classified by Issuers)

2016 - 2025

Public Debt Management Office, Ministry of Finance

THB Mil.

CLMV

30,000

66,499 THB Mil.

26,590 THB Mil.

Non-Gov’t

10%

(23,066) MHBK

(6,500 THB Mi ) l.

Baht

International Credit Rating

30%

Size : 3,000 THB Mil. Issue: Sept 28th, 2015

20,000

IFIs ,

Lao PDR (Government)

& CGIF

(20,090 THB Mil.)

(39,909 THB Mil.)

KEXIM

(10,000)

10,000

(5,668)

(434)

CITI

Today

WOORI

HANA

WOORI

WOORI CABEI Lao PDR (Gov,t)

KEXIM

(6,330)

Lao PDR (Gov,t)

EDL-Gen Lao PDR (Gov,t)

Lao PDR (Gov,t)

(8,000)

(5,701)

KEXIM CABEI

EDL-Gen

(1,500)

Lao PDR (Gov,t)

KEXIM

(2,800)

KEXIM

(3,000)

Lao PDR (Gov,t)

EDL-Gen

Source : PDMO (As of 30th September , 2016)

2007 - 2015

Growth of Corporate Bond Outstanding has Accelerated

Baht Bond Outstanding

Total Outstanding 10,611,220 THB Mil.

Corporate Bond Outstanding % Share of Corporate Bond Outstanding to Bond Market Capitalization % Share of Baht Bond Outstanding to Bond Market Capitalization

Baht Bond 1% 66,499 THB Mil

25% Corp Bond 25% 66,499 THB Mil.

20%

2,682,581 THB Mil

2,682,581

18%

THB Mil.

SOEs Bond 8% BOT Bond

28%

2,961,302 THB Mil. GOVT Bond

1.4%

0.6%

38%

4,078,547 THB Mil.

End of Sep 2016

Source : ThaiBMA (As of 30th September , 2016)

Corporate Bond & Baht Bond Outstanding (Classified by TTMs) THB Mil.

Average size per issuance:

867 THB Mil.

34%

1,000,000

35,563.8

26%

887,947.0

Total Outstanding : Number of Corporate Bond: Average size per issuance:

2,353, 578 THB Mil. 2,715 (Series) 867 THB Mil. Baht Bond Corporate Bond

1,934.0 716,733.5

16%

500,000

13,701.2

411,193.3

10% 4,300.0

11% 11,000.0 300,140.6

279,638.1

3% -

TTM (Years)

80,708.0

Source : ThaiBMA (As of 30th September , 2016)

Remark : Excluded Commercial Papers (less than 1 year at issue)

Corporate Bond & Baht Bond Outstanding (Classified by Size)

are 10 Major Corporates

THB Mil. 200000

Corporate Bond CPALL

Outstanding (THB Mil.)

B Rated Group (BBB, BB)

Baht Bond

10,001 – 50,000

21%

≤ 10,000

215

76%

Total

284

100%

Baht Bond

PTT

Lao PDR (Gov’t)

BahtLaoBond PDR (EDL-Gen)

100000

% Share of Outstanding

≥ 50,001

Unrated

SCG

150000

No. of Issuers

A Rated Group (AAA, AA, A)

CPF BAY

Lao PDR (Gov’t)

THAI

(BBB+) 20,090 THB Mil.

50,000 50000

Lao PDR (EDL-Gen) (BBB+) 6,500 THB Mil.

10,000 0

Issuer 1

Issuer 284

Source : ThaiBMA (As of 30th September , 2016)

Remark : Excluded Commercial Papers (less than 1 year at issue)

Corporate Bond & Baht Bond Outstanding (Classified by Credit Rating) THB Mil. 200000

Corporate Bond

Rating

AA Rated

150000

No. of Issuers

375,242

16%

425,044

18%

BB Rated

954,596

41%

Unrated

BBB

432,600

18%

35,642

BBB Rated

PTT

% Share of Outstanding

AAA

A Rated

CPALL

Outstanding (THB Mil.)

AAA Rated

is A Rated

Baht Bond Baht Bond

Baht Lao Bond PDR (Gov’t) Lao PDR (EDL-Gen)

Unrated

127,123

Total

2,353, 578

123

100%

284

100000

Lao PDR (Gov’t)

SCG

BAY

(BBB+) 20,090 THB Mil.

CPF THAI 50000 50,000

Lao PDR (EDL-Gen) (BBB+) 6,500 THB Mil.

10,000 0

AAA AA Source : ThaiBMA (As of 30 September , 2016) th

BBB

BB Unrated

Remark : Excluded Commercial Papers (less than 1 year at issue)

Annual Capital Flow classified by GOVT & BOT Bond (2007 – 2016)

159,554 THB mil. (2016YTD)

THB Mil.

350,000

159,554 THB mil

300,000

250,000

+93,249

BOT Bond 121,120 THB mil.

200,000

GOVT Bond 38,434 THB mil.

+84,003

150,000 +23,052

100,000 +129,454

50,000

-50,000

121,120

+196,463

+30,216 -22,494

-2,793

+117,144

+96,738 38,434

29,642

-1,598 -7,506

-53,807

-27,157

-71,124

-100,506 -37,994

-100,000

-150,000

2016 YTD

Non-resident Net Buy/Sell in BOT Bond Non-resident Net Buy/Sell in GOVT Bond

2016 Weekly (The past 39 weeks) THB Mil.

150,000

As of 30th Sep, 2016

Net Change in Non-resident Holding (YTD) BOT Bond vs GOVT Bond

As o

(1 USD/ THB) THB Mil.

Accumulative NR Holding = 159,554 THB mil. (Since 1 Jan – 30 Sep 2016)

125,000

BOT Bond 100,000

121,120

THB mil.

75,000

50,000

GOVT Bond 25,000

38,434 THB mil.

-25,000

1 USD = 34.625 THB

-50,000 -75,000

-100,000

-125,000

Foreign Exchange (USD/THB)

NR Holding in GOVT Bond

NR Holding in BOT Bond

WK1 WK2 WK3 WK4 WK5 WK6 WK7 WK8 WK9 WK10 WK11 WK12 WK13 WK14 WK15 WK16 WK17 WK18 WK19 WK20 WK21 WK22 WK23 WK24 WK25 WK26 WK27 WK28 WK29 WK30 WK31 WK32 WK33 WK34 WK35 WK36 WK37 WK38 WK39 WK40 WK41 WK42 WK43 WK44 WK45 WK46 WK47 WK48 WK49 WK50 WK51 WK52

-150,000

As of 30th Sep, 2016

Non-Resident Holding in THB Bond = 732,436 THB Mil.

Outstanding

Thai Bond Market Cap. = 10,612,220 THB Mil.

GOVT Bond GOVT Bond

574,063 592,966

BOT Bond Bond BOT

118,177 138,591

SOE Bond Bond SOE

0 73

Corp Bond Corp Bond

6.24% 5.587% 1.390% 1.28% 1.306% 1.28 0.00% 0.001% 0.01 0.008% 0.01%

806 666

732,436

TOTAL TOTAL

7.53% % 6.902

692,906

GOVT Bond Outstanding 4,078,547

BOT Bond Outstanding 2,961,302THB Mil.

THB Mil.

Non-Resident 138,591 THB Mil.

Non-Resident 592,966 THB Mil.

28%

% of Thai Thai Bond Bond Market Market Cap. % Share of (9,202,573 THB Million)

Non-Res i dent Hol di ng Non-Resident Holding (THB Mi l l i on) (THB Million)

Issuer Issuer

25%

2,961,302 THB Mil. Domestic Investors

Domestic Investors

38%

2,822,711 THB Mil.

3,485,581 THB Mil.

95.3

85.5

4,078,547 THB Mil.

As of 30th Sep, 2016

Peers Comparison

Non-Resident Holding in Thai GOVT Bond is 592,966 THB mil. or 14.5 % of Total GOVT Bond Outstanding

Percentage share of Non-resident Holding in Local Government Bond (Mar 2008 - Present)

40% Indonesia

39.1% Jun’ 16

Malaysia 34.52% 30%

Junr’ 16

Peak @ 19.1% (Apr’ 13)

20%

Thailand

14.5%

As of 30th Sep,16

Japan 10.26% Mar’ 16

10%

Korea 9.65 % Jun’16

2008

2009

Source : AsianBondsOnline, ThaiBMA

2010

2011

2012

2013

2014

2015

Dec-16

Jun-16

Sep-16

Mar-16

Dec-15

Jun-15

Sep-15

Mar-15

Dec-14

Jun-14

Sep-14

Mar-14

Dec-13

Jun-13

Sep-13

Mar-13

Dec-12

Jun-12

Sep-12

Mar-12

Dec-11

Jun-11

Sep-11

Mar-11

Dec-10

Jun-10

Sep-10

Mar-10

Dec-09

Jun-09

Sep-09

Mar-09

Dec-08

Jun-08

Sep-08

Mar-08

e a

2016

2016 As of 30th Sep, 2016

Source: Public Sector Development Group, PDMO

Pro-active Debt Management

Develop Domestic Bond Market to be a Sustainable Source of Funding for the Stability of Thailandâ&#x20AC;&#x2122;s Financial System

Foster Strong and Effective Organization

3 PDMOâ&#x20AC;&#x2122;s Strategies

Formulate sound public debt management policies and strategies as well as conduct, monitor and evaluate public debt management operations under the relevant legal framework and guidelines

Mission

Transparency, Discipline, Trustworthiness, Driving Social and Economic Development

Values

Professional in public debt management for sustainable development

Vision

Nantachod Samarnwong

Economist

Sittan Sathianphattanakool

Economist

Nattakarn Boonsri, Director

Government Bond Market Development Division

Nattakarn Boonsri, Senior Expert

Kittipoom Ounjai

Economist

Phimonphan Tanwattana

Economist

Wanthanee Phongam

Economist

Paroche Hutachareon, Director

Senior Expert on Bond Market Development

Executive Director

Upama Jaihong

Bond Market Development Bureau

Fund Management and Bond Market Infrastructure Development Division

Sunee Eksomtramate Executive Director

Pimpen Ladpli

Ekaraj Khuankhunsathid Executive Director

Executive Director

Policy and Planning Bureau

Public Infrastructure Project Management and Evaluation Bureau Acting Executive Director

Phacharaporn Khotnarin

Economist

Sriarpa Ruangruchira

Senior Economist

Puttipong Kanna

Economist

Oraporn Thomya, Director

International Bond Market Policy Division

Executive Director

Jindarat Viriyataveekul Jindarat Viriyataveekul

Public Infrastructure Project Financing Bureau

Sirasa Kanpittaya

Theeraj Athanavanich

Debt Management Bureau 2

Deputy Director-General

Suwit Rojanavanich

Director-General

Deputy Director-General

Debt Management Bureau 1

Bond Market Advisor

Front Office Middle Office Back Office Support Offic

Siribha Satayanon Secretary

Office of the Secretary

Nakarin Prompat, Acting Director

Financial Product Development Division

Teeralak Sangsnit Executive Director

Payment Administration Bureau

Risk Management Group

Information Technology Center

Legal Advisory Group

Public Sector Development Group

Internal Audit Group

Ace Viboolcharern Public Debt Advisor

Public Debt Advisor

For Further Information : Upama Jaihong

upama@pdmo.go.th

Executive Director of Bond Market Development Bureau

Nattakarn Boonsri

nattakarn@pdmo.go.th

Senior Expert on Bond Market Development

Paroche Hutachareon

paroche@pdmo.go.th

Director of Fund Management and Bond Market Infrastructure Development Division

Oraporn Thomya

oraporn@pdmo.go.th

Director of International Bond Market Policy Division

Nakarin Prompat

nakarin@pdmo.go.th

Acting Director of Financial Product Development Division