FINANCE MINISTRY TO ISSUE BT170-BN BONDS IN 2010

       The Finance Ministry will issue Bt170 billion worth of savings bonds in fiscal 2010 as part of a government plan to raise Bt801 billion via various types of financial instruments.

       Types of bonds the ministry will issue in the coming fiscal year beginning October 1 are savings bond, floating-rate bonds and inflation-linked bonds.
       It will raise Bt801 billion by issuing long-term bonds, Pongpanu Svetarundra, outgoing director-general of the Public Debt Management Office, said yesterday.
       However, this fund-raising plan will be changed over time to meet changing economic conditions, such as rises or falls in government revenue, he said.
       Several objectives will be met with the fund-raising plan. The government must finance a budget deficit estimated at Bt350 billion. It must also refinance Bt180 billion worth of debt by the Financial Institutions Development Fund and finance Bt270 billion worth of public investment projects under the Thai Khemkhaeng stimulus package.
       The ministry has not yet decided on maturity for the Bt170 billion worth of savings bonds, although it is expected to be no less than five years. Savings bonds totalling Bt70 billion will be issued in the first three months of fiscal 2010.
       The Finance Ministry will also issue long-term bonds with maturity of five to 30 years, said Pongpanu.
       It will issue bonds with maturity of five years every month, with each tranche worth Bt11 billion to Bt13 billion for a total amount of Bt140 billion. Ten-year maturity bonds will be issued in every odd-numbered month worth Bt11 billion to 12 billion a tranche for a total amount of Bt70 billion.
       The ministry will issue bonds with 15 years' maturity in each even-numbered month worth Bt7 billion a tranche for a total ofBt40 billion. Twenty-year-maturity bonds will be issued in every odd-numbered month, worth Bt7 billion a tranche. Thirty-year-maturity bonds will be issued in every even-numbered month, with each tranche worth Bt3 billion.
       The ministry will issue bonds of four years' maturity and with a floating rate in each odd-numbered month, at Bt6 billion a tranche. And Bt10 billion worth of inflation-linked bonds with a coupon rate tied to the inflation rate will be issued in the second half of the fiscal year, Pongpanu said.
       The ministry will not issue short-term bonds with maturity of two or three years in fiscal 2010 but does expect to issue them in fiscal 2011.
       Pongpanu said the ministry would also borrow money directly from banks by issuing Bt100 billion worth of promissory notes with five years' maturity.
       Pongpanu next month will start his new job as director-general of the Comptroller-General's Department.
       The fund-raising is also aimed at ensuring a cash flow for the government, whose Treasury reserves now stand at Bt280 billion.