Bloomberg News

Thailand Hires HSBC as Lead Manager for Inflation-Linked Bonds

June 15, 2011

June 15 (Bloomberg) -- Thailand hired HSBC Holdings Plc as lead manager for its first offering of inflation-linked bonds next month.

Siam Commercial Bank Pcl, Krung Thai Bank Pcl and Kasikornbank Pcl will also help manage the 40 billion baht ($1.3 billion) sale to individual and institutional investors from July 11 to 13, Chakkrit Parapuntakul, director-general of the finance ministry’s Public Debt Management Office, said in an interview today. Southeast Asia’s second-largest economy will join South Korea and Japan in issuing such debt as the fastest inflation in 32 months erodes returns on regular bonds.

Thailand plans to meet institutional investors in London, Singapore and Hong Kong between June 20 and June 24, Chakkrit said. The majority of the debt will be sold domestically, he added.

Thai government bonds have returned 1.3 percent this year, the second-worst performance after the Philippines among 10 local-currency debt indexes in the region compiled by HSBC. Returns on the inflation-linked bonds will be based on the headline consumer price index and paid every six months, Chakkrit said. Prices climbed 4.19 percent in May from a year earlier, a government report on June 1 showed.

The Bank of Thailand raised its benchmark one-day bond repurchase rate on June 1 for the fourth time this year, boosting it by a quarter of a percentage point to 3 percent. Governor Prasarn Trairatvorakul said last week that inflation remains the key risk factor for Thailand.

Hong Kong’s Financial Secretary John Tsang said in February that the city plans to sell as much as HK$10 billion ($1.3 billion) of inflation-linked securities to individual investors starting in six months.

--With assistance from Suttinee Yuvejwattana in Bangkok and David Yong in Singapore. Editors: Andrew Janes, Simon Harvey

To contact the reporter on this story: Yumi Teso in Bangkok at yteso1@bloomberg.net

To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net


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