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[webfact]

Govt to issue bonds to refinance FIDF debt
Wichit Chaitrong
The Nation

BANGKOK: -- The Finance Ministry will start issuing government bonds to refinance the debt of the Financial Institutions Development Fund (FIDF) worth Bt300 billion due this year thanks to lower interest rates, as the cost of refinancing is much lower than the cost of existing bonds.

The central bank has not yet found |a source for funds to repay the FIDF debt.

The Public Debt Management Office is preparing to issue government bonds to refinance Bt206 billion of the FIDF debt due in September this year, said Chakkrit Parapuntakul, the Office director-general.

Since the debt amount is large, the ministry will issue bonds in a phased manner to lessen its impact on the yield curve of government bonds, he said. Each tranche would be not more than Bt50 billion, he said.

He said the previous bonds, worth Bt206 billion, carried a high cost at about 6 per cent per annum. The current market rate is about 3 per cent, so the refinancing should lower the interest cost, he said.

Debt of about Bt30 billion to Bt40 billion would be due in March and the ministry could borrow from the market right away to repay it, he said.

The government has earmarked a budget of Bt68 billion this year to pay the interest cost of the Bt1.14-trillion FIDF debt, but actual interest cost should be about Bt62 billion due to the low interest-rate trend in the market, he said.

The central bank has not yet decided how much more in premiums it could raise from commercial banks to repay the FIDF debt incurred since the 1997 Asian financial crisis. The government recently issued an emergency decree ordering the central bank to pay this debt.


-- The Nation 2012-02-13

[givenall]

High risk bonds, since dine the government gives money away to friends and also for vote buying

[Orac]

Seems like a no-brainer to me - currently paying 6% interest on a loan and can refinance to pay around 3% saving possibly BT.30 billion a month or more.

[Beechboy]

Orac, on 2012-02-13 09:17:58, said:

Seems like a no-brainer to me - currently paying 6% interest on a loan and can refinance to pay around 3% saving possibly BT.30 billion a month or more.

Yes, it's quantative easing, otherwise known as printing money. In the UK it has led to lower interest rates and increased inflation.

[Orac]

Beechboy, on 2012-02-13 12:18:34, said:

Orac, on 2012-02-13 09:17:58, said:

Seems like a no-brainer to me - currently paying 6% interest on a loan and can refinance to pay around 3% saving possibly BT.30 billion a month or more.

Yes, it's quantative easing, otherwise known as printing money. In the UK it has led to lower interest rates and increased inflation.

If the old bonds are expiring then I am not sure this could be classed as QE or money printing if it is just new debt replacing old debt.

[IMA_FARANG]

My personal opinion....you'd be a fool to buy them.
Just for the reason that ANY bond issue would need to be based on the real ability of the Thai government to be able to pay for them.
And, be honest.....do you really think the Thai government is in a financial place where they can honestly say they will be able to pay the interest on them in x number of years?
Especially with this current government and the worldwide economic outlook?
Personally, I would have more faith in giving a bargirl in Pattaya an "advance" on a bj next week than counting on the current Thai government to "meet it's obligations".
But that's just my opinion.
And I doubt there is going to be any "bailout" scam like the one currently being forced down the throats of the EU nation's taxpayers.

Edited by IMA_FARANG, 2012-02-13 15:22:45.

[TallGuyJohninBKK]

IMA_FARANG, on 2012-02-13 15:21:49, said:

Personally, I would have more faith in giving a bargirl in Pattaya an "advance" on a bj next week than counting on the current Thai government to "meet it's obligations".

Can't say I ever recall hearing this particular analogy ( )  used in discussion of the FIDF debt...

Who ever said Thai banking is boring?  

[bendix]

IMA_FARANG, on 2012-02-13 15:21:49, said:

My personal opinion....you'd be a fool to buy them.
Just for the reason that ANY bond issue would need to be based on the real ability of the Thai government to be able to pay for them.
And, be honest.....do you really think the Thai government is in a financial place where they can honestly say they will be able to pay the interest on them in x number of years?
Especially with this current government and the worldwide economic outlook?
Personally, I would have more faith in giving a bargirl in Pattaya an "advance" on a bj next week than counting on the current Thai government to "meet it's obligations".
But that's just my opinion.
And I doubt there is going to be any "bailout" scam like the one currently being forced down the throats of the EU nation's taxpayers.

Given that you choose to illustrate your analysis of Thailand's sovereign debt rating with reference to Pattaya bjs, I'd suggest your opinion isnt really worth much.

The fact is Thailand has one of the best sovereign credit ratings in the developing world. It is equal to or better than all the BRICS, with the exception of China, largely because it has such high foreign currency reserves.

Given Thailand is regularly being signalled in the neutral to positive outlook category at a time when Fitch today downgraded most of Europe, I'd say your money is safer with Thai sovereign debt than with Khun Nok from soi 6.

[samran]

you beat me to it Bendix.

I know Khun Chakrit. He'd wipe the floor intellectually with most all people on this thread.

[bendix]

samran, on 2012-02-14 09:44:59, said:

you beat me to it Bendix.

I know Khun Chakrit. He'd wipe the floor intellectually with most all people on this thread.

I think you've provided a new definition for the phrase 'damning by faint praise'.

[phutoie2]

samran, on 2012-02-14 09:44:59, said:

you beat me to it Bendix.

I know Khun Chakrit. He'd wipe the floor intellectually with most all people on this thread.

Well he certainly would with you, if that's an example of your English ability.

[samran]

phutoie2, on 2012-02-14 12:44:28, said:

samran, on 2012-02-14 09:44:59, said:

you beat me to it Bendix.

I know Khun Chakrit. He'd wipe the floor intellectually with most all people on this thread.

Well he certainly would with you, if that's an example of your English ability.

Really, is that the best you have got? Oh dear. A balaclava clad emotiocon no less.

Well it has been used often enough in my neck of the woods. Last I heard English was a language which has the ability to evolve. But maybe not in pedantville where you obviously live.