Kingdom of Thailand Bond Market Development

Kingdom of Thailand Bond Market Development

50 30

$ 6 Bil

20

15

P/N

P/N

P/N

ILB

10

50% ILB

20%

30%

Sustainability

7

5

$ 3 Bil

SB

3 SB

GOVT Debt Folio

9 yr ATM

O u t s t a n d i n g

S i z e

OCTOBER 2012

EBT MANAGEMENT OFFICE INNOVATION INFLATION-LINKED-BOND PIONEER PD DF CGIF DEDICATION BENCHMARK BOND FISCAL DISCIPLINE COMMMITMENT B OND MARKET DEVELOPMENT ACHIEVEMENTS PUBILC DEBT MANAGEMENT OF FICE INNOVATION INFLATION-LINKED-BOND PIONEER PDDF CGIF DEDICATION BE NCHMARK BOND FISCAL DISCIPLINE COMMMITMENT BOND MARKETDEVELOPM ENT ACHIEVEMENTS PUBILC DEBT MANAGEMENT OFFICE INNOVATION INFLATIO N-LINKED-BOND PIONEER PDDF CGIF DEDICATION BENCHMARK BOND FISCAL DI SCIPLINE COMMMITMENT BOND MARKET DEVELOPMENT ACHIEVEMENTS PUBI LC DEBT MANAGEMENT OFFICE INNOVATION INFLATION-LINKED-BOND PIONEER PDDF CGIF DEDICATION BENCHMARK BOND FISCAL DISCIPLINE COMMMITMENT BOND MARKET DEVELOPMENT ACHIEVEMENTS PUBILC DEBT MANAGEMENT OF FICE INNOVATION INFLATION-LINKED-BOND PIONEER PDDF CGIF DEDICATION BE NCHMARK BOND FISCAL DISCIPLINE COMMMITMENT BOND MARKET DEVELOP MENT ACHIEVEMENTS PUBILC DEBT MANAGEMENT OFFICE INNOVATION INFLAT ION-LINKED-BOND PIONEER PDDF CGIF DEDICATION BENCHMARK BOND FISCAL DISCIPLINE COMMMITMENT BOND MARKET DEVELOPMENT ACHIEVEMENTS PU BILC DEBT MANAGEMENT OFFICE INNOVATION INFLATION-LINKED-BOND PIONE ER PDDF CGIF DEDICATION BENCHMARK BOND FISCAL DISCIPLINET COMMMITM ENT BOND MARKET DEVELOPMENT ACHIEVEMENTS PUBILC DEBT MANAGEMEN T OFFICE INNOVATION INFLATION-LINKED-BOND PIONEER PDDF CGIF DEDICATIO N BENCHMARK BOND FISCAL DISCIPLINE COMMMITMENT BOND MARKET DEVE LOPMENT ACHIEVEMENTS PUBILC DEBT MANAGEMENT OFFICE INNOVATION IN FLATION-LINKED-BOND PIONEER PDDF CGIF DEDICATION BENCHMARK BOND FI SCAL DISCIPLINE COMMMITMENT BOND MARKET DEVELOPMENT ACHIEVEMEN TS PUBILC DEBT MANAGEMENT OFFICE INNOVATION INFLATION-LINKED-BOND P IONEER PDDF CGIF DEDICATION BENCHMARK BOND FISCAL DISCIPLINE COMMM ITMENT BOND MARKET DEVELOPMENT ACHIEVEMENTS PUBILC DEBT MANAGE MENT OFFICE INNOVATION INFLATION-LINKED-BOND PIONEER PDDF CGIF DEDI CATION BENCHMARK BOND FISCAL DISCIPLINE COMMMITMENT BOND MARKET DEVELOPMENT ACHIEVEMENTS PUBILC DEBT MANAGEMENT OFFICE INNOVATIO N INFLATION-LINKED-BOND PIONEER PDDF CGIF DEDICATION BENCHMARK BON D FISCAL DISCIPLINE COMMMITMENT BOND MARKET DEVELOPMENT ACHIEVE MENTS PUBILC DEBT MANAGEMENT OFFICE INNOVATION INFLATION-LINKED-BO ND PIONEER PDDF CGIF DEDICATION BENCHMARK BOND ACHIEVEMENTS PUBIL C DEBT MANAGEMENT OFFICE INNOVATION INFLATION-LINKED-BOND PIONEER PDDF CGIF DEDICATION BENCHMARK BOND FISCAL DISCIPLINE COMMMITMENT BOND MARKET DEVELOPMENT ACHIEVEMENTS PUBILC DEBT MANAGEMENT OF FICE INNOVATION INFLATION-LINKED-BOND PIONEER PDDF CGIF DEDICATION BE

This booklet is produced and printed in-house by Bond Market Development Bureau Public Debt Management Office Ministry of Finance, Kingdom of Thailand This booklet can be downloaded at www.pdmo.go.th

e-book

Domestic Bond Market Development A. Evolution of Bond Market Development (1995 – Present) • 1997 Asian Financial Crisis  The Rude Awakening • Thai Bond Market Has Grown Strongly and Rapidly for More than a Decade • Innovation of Government’s Debt Securities • Equilibrium of Thai Bond Market

2

B. Building up of Benchmark Bond (FY2007 - FY2012) • PDMO Revised the Strategies of Benchmark Bond Issuance in 3 Ways • Keep Our Word to Get Investors Confidence for the Plan  Firm Committed Supply of Benchmark Bond Regardless of Budget Uncertainty • Key Success Indicators of Benchmark Bond Liquidity • Market’s Favorite Benchmark Bond

6

C. Bond Supply FY2013 + Funding Needs FY2013 - FY2015 • FY 2013 Total Funding Needs (by Bills)  1,028,219 THB mil.

• FY 2013 Total Fund Raising (by Instruments)  1,095,219 THB mil.

• FY 2013 Benchmark Bond (3-5-7-10-15-20-30-50 tenors)  525,000 THB mil.

• FY 2013’Q1 Government Bond Auction Schedule  150,500 THB mil.

• Fund Raising Strategies  Building Benchmark Bond to Stabilize Yield Curve  Segmenting Investors Base to Diversify Dependency Risk •Next Phase of Inflation Linked Bond  Creating Liquidity & Extending Yield Curve

12

D. Well-Developed Bond Market Improved Government Debt Profile Dramatically • Full Capacity of Government Funding Instruments (FY 2013)  1,150,000 THB Mil (equiv. 40,000 USD Bil) • Systematic Benchmark Bond Issuance  Lengthened ATM by 3 ½ years  Lowered cost by 30 basis points  Enhanced fixed-float Ratio  Reduced bunching risk

19

FY 2012 HIGHLIGHTS  FIDF Decree passed : reduced fiscal burden by 70,000 MB a year (though Public Debt remains unchanged)  PDDF activated : restructuring of FIDF’s 340,122 MB saved over 7,000 MB a year & enhanced overall FIDF portfolio profile  CGIF activated : to enable investment-grade ASEAN+3 issuers to access foreign currency bond markets

Founding 13 MOF-outright PD : upgrading PD duties & privileges to actively play role as market makers  Electronic Retail Savings Bond : to promote savings society & to diversify Government funding instruments

23

ACHIEVEMENTS PUBILC DEBT MANAGEMENT OFFICE INNOVATION INFLATION-LI NKED-BOND PIONEER PDDF CGIF DEDICATION BENCHMARK BOND FISCAL DISCIP LINE COMMMITMENT BOND MARKET DEVELOPMENT ACHIEVEMENTS PUBILC D EBT MANAGEMENT OFFICE INNOVATION INFLATION-LINKED-BOND PIONEER PD DF CGIF DEDICATION BENCHMARK BOND FISCAL DISCIPLINE COMMMITMENT B OND MARKET DEVELOPMENT ACHIEVEMENTS PUBILC DEBT MANAGEMENT OF FICE INNOVATION INFLATION-LINKED-BOND PIONEER PDDF CGIF DEDICATION BE NCHMARK BOND FISCAL DISCIPLINE COMMMITMENT BOND MARKETDEVELOPM ENT ACHIEVEMENTS PUBILC DEBT MANAGEMENT OFFICE INNOVATION INFLATIO N-LINKED-BOND PIONEER PDDF CGIF DEDICATION BENCHMARK BOND FISCAL DI SCIPLINE COMMMITMENT BOND MARKET DEVELOPMENT ACHIEVEMENTS PUBI LC DEBT MANAGEMENT OFFICE INNOVATION INFLATION-LINKED-BOND PIONEER PDDF CGIF DEDICATION BENCHMARK BOND FISCAL DISCIPLINE COMMMITMENT BOND MARKET DEVELOPMENT ACHIEVEMENTS PUBILC DEBT MANAGEMENT OF FICE INNOVATION INFLATION-LINKED-BOND PIONEER PDDF CGIF DEDICATION BE NCHMARK BOND FISCAL DISCIPLINE COMMMITMENT BOND MARKET DEVELOP MENT ACHIEVEMENTS PUBILC DEBT MANAGEMENT OFFICE INNOVATION INFLAT ION-LINKED-BOND PIONEER PDDF CGIF DEDICATION BENCHMARK BOND FISCAL DISCIPLINE COMMMITMENT BOND MARKET DEVELOPMENT ACHIEVEMENTS PU BILC DEBT MANAGEMENT OFFICE INNOVATION INFLATION-LINKED-BOND PIONE ER PDDF CGIF DEDICATION BENCHMARK BOND FISCAL DISCIPLINET COMMMITM ENT BOND MARKET DEVELOPMENT ACHIEVEMENTS PUBILC DEBT MANAGEMEN T OFFICE INNOVATION INFLATION-LINKED-BOND PIONEER PDDF CGIF DEDICATIO N BENCHMARK BOND FISCAL DISCIPLINE COMMMITMENT BOND MARKET DEVE LOPMENT ACHIEVEMENTS PUBILC DEBT MANAGEMENT OFFICE INNOVATION IN FLATION-LINKED-BOND PIONEER PDDF CGIF DEDICATION BENCHMARK BOND FI SCAL DISCIPLINE COMMMITMENT BOND MARKET DEVELOPMENT ACHIEVEMEN TS PUBILC DEBT MANAGEMENT OFFICE INNOVATION INFLATION-LINKED-BOND P IONEER PDDF CGIF DEDICATION BENCHMARK BOND FISCAL DISCIPLINE COMMM ITMENT BOND MARKET DEVELOPMENT ACHIEVEMENTS PUBILC DEBT MANAGE MENT OFFICE INNOVATION INFLATION-LINKED-BOND PIONEER PDDF CGIF DEDI CATION BENCHMARK BOND FISCAL DISCIPLINE COMMMITMENT BOND MARKET DEVELOPMENT ACHIEVEMENTS PUBILC DEBT MANAGEMENT OFFICE INNOVATIO N INFLATION-LINKED-BOND PIONEER PDDF CGIF DEDICATION BENCHMARK BON D FISCAL DISCIPLINE COMMMITMENT BOND MARKET DEVELOPMENT ACHIEVE MENTS PUBILC DEBT MANAGEMENT OFFICE INNOVATION INFLATION-LINKED-BO ND PIONEER PDDF CGIF DEDICATION BENCHMARK BOND ACHIEVEMENTS PUBIL C DEBT MANAGEMENT OFFICE INNOVATION INFLATION-LINKED-BOND PIONEER PDDF CGIF DEDICATION BENCHMARK BOND FISCAL DISCIPLINE COMMMITMENT BOND MARKET DEVELOPMENT ACHIEVEMENTS PUBILC DEBT MANAGEMENT OF 01 FICE INNOVATION INFLATION-LINKED-BOND PIONEER PDDF CGIF DEDICATION BE

A. Evolution of Bond Market Development (1995 – Present) Public Debt Management Office, Ministry of Finance, Kingdom of Thailand

• 1997 Asian Financial Crisis  The Rude Awakening • Thai Bond Market Has Grown Strongly and Rapidly for More than a Decade • Innovation of Government’s Debt Securities • Equilibrium of Thai Bond Market

FY 2013 Domestic Bond Market Development

• To Enhance Liquidity • To Broaden Investor Base • To Strengthen Fiscal Sustainability

Public Debt Management Office, Ministry of Finance, Kingdom of Thailand

50-year Benchmark Bond March 2th 2011

12-year and 18-year Fixed-rate Promissory Note December 22nd 2010

30-year

Q1

Benchmark Bond April 23nd 2008

10-year Inflation Linked Bond

Q2

July 11th 2011

5-year Step-up Savings Bond

6-year Step-up Savings Bond

H2

June 7th 2010

th

July 15 2009

4-year Floating Rate Bond 3-year Electronic Retail Savings Bond

July 27th 2009

September 12th 2011

FY 2008

2009

2010

2011-12

FY 2013

02

1997 Asian Financial Crisis

The Rude Awakening Public Debt Management Office, Ministry of Finance, Kingdom of Thailand

% Share of GDP

140% 128%

120%

Balanced

100%

90% 80%

84% 71%

60%

8.2 THB Trillion 31 August 2012

40% 24% Asian Fin. Crisis

20%

12%

Bank Loan /GDP

Equity/GDP

Bond Market Cap. = 8.2 THB Trillion ($280 Bil.)

2012 (Jun)

0% Bond Market / GDP

GOVT Bond = 3.1 THB Trillion ($100 Bil.)

Public Debt Management Office, Ministry of Finance, Kingdom of Thailand

% Share of GDP

Domestic Bond Market Classified by Issuer

140%

128% 120% 100%

Baht Bond

1%

Corp. Bond

19%

SOE Bond

7%

90%

80%

84%

71%

60%

$280 Bil.

40%

(Aug 2012)

24%

Asian Fin. Crisis

20%

Bank Loan /GDP

Equity/GDP

2012 (Jun)

12%

0%

Bond Market / GDP

Maturity Profile

BOT Bond 2.9 THB Trillion

35%

BOT vs GOVT Bond BOT ATM = 1yr GOVT ATM = 7yrs 6mths

GOVT Bond

14% 22%

62% BOT < 1y

3

33% 2-3y

17% 5% 3-5y

($100 bil)

MOF 26%

21%

6-10y

11-50y

3.1 THB Trillion

38%

Bond Market Developed Rapidlyand andEfficiently Efficiently The The ThaiThai Bond Market hasHas Developed Rapidly Public Debt Management Office, Ministry of Finance, Kingdom of Thailand

Post Crisis – 2000 :

10

2007 – 2010 :

Volume Oriented

 Bond Market Capitalisation tripled  Government Bonds Outstanding grew by 50 times  Government Bond Market Share jumped from 3% in 1997 to 44% in 2000

8

Next Step 2011-13:

Development Oriented

100%

(Market Deepening Oriented)

 Regular Benchmark Issuance  New Product Development  Regular Market Dialogue with BoT and PDs

 50-yr Bond, ILB, Electronic Retail Bond  Upgrade PD Privileges  Regional Linkage (CGIF)  Amortised Bond  Bond Switching & Bond Consolidation

80%

71% % of GDP

60%

THB Trillion

6

Pre-Crisis - Illiquid Bond Market - Absence of Benchmark Bond - Dominated by SoE’s Bonds

4

40%

20%

0

0%

2012 (Aug)

2

FY2007 – FY2013

Innovation of GOV’T Debt Securities

FY 2007-10

Public Debt Management Office, Ministry of Finance, Kingdom of Thailand

30-yr Benchmark Bond

• Lengthen average-time-to-maturity of Total Government Debt Portfolio  5yrs 7mths to 7yrs 6mths • Meet Long-term investors’ demand

Floating Rate Bond

• Increase floating debt ratio of Total Government Debt Portfolio 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

FY 2012-2013

FY 2011

From 2007 - 2012

Fixed Rate Promissory Note

• Broaden investor base – Insurance / Long-term investors • Non-Benchmark tenors

50-yr Benchmark Bond

• Combat low interest rate + Lengthen average time-to-maturity • 4th country in the world (1st : UK 2nd : France 3rd : China)

10-yr Inflation-Linked Bond (ILB)

• Strong anti-inflationary signal • Deepen the Development of the Bond market • 1st country in Emerging Asian Economies

Electronic Retail Savings Bond

• Lower Minimum Amount to Purchase / Offer throughout the year • Develop the retail bond into an electronic form  Scripless System • Can be purchased via ATM, in addition of Bank Retail Branches

Amortised 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

Upgrade PD Privileges

• Allow both issuer and investors to improve their portfolio • Larger outstanding size + Less bond series  more liquidity in the secondary market

PDDF Activated

(Public Debt Restructuring and Domestic Bond Market Development Fund)

15-yr ILB

Baht Bond

CGIF Activated

(Credit Guarantee and Investment Facility)

4

Equilibrium of Thai Bond Market Public Debt Management Office, Ministry of Finance, Kingdom of Thailand

Issuers

• 81 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

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) BBBNon-rated

Baht Bond 1%

CB 10%

7%

4%

Private Sector

NR 10%

AAA

SOEs

Government

7%

38% Central Bank

35% Source : ThaiBMA (31 August 2012)

5

1% 2%

A AA

19%

State Agencies Debt Securities (Classified by Types of Investors)

4%

Government

SOEs

38%

7

%

Central Bank

35% Source : ThaiBMA (31 August 2012)

Household and Non-profit

Insurance and Other Corporation

32%

9% Depository Corporation

39% Source : CB (30 June 2012)

B. Building up of Benchmark Bond (FY2007 - FY2012) Public Debt Management Office, Ministry of Finance, Kingdom of Thailand

• PDMO Revised the Strategies of Benchmark Bond Issuance in 3 Ways • Keep Our Word to Get Investors Confidence for the Plan



Firm Committed

Supply of Benchmark Bond Regardless of Budget Uncertainty • Key Success Indicators of Benchmark Bond Liquidity • Market’s Favorite Benchmark Bond

6

2550 ต inต3 ways ด (FY2007-FY2013) PDMO Revised the Strategy of Benchmark Bond Issuance ,

Public Debt Management Office, Ministry of Finance, Kingdom of Thailand

I. Reduce Auction Frequency

II. Increase Auction Size

from

Once a Week to Every Other Month

(to Create Even Distribution of the Benchmark Bond Supply over the Year)

Tenors: 3-5-7-10 yrs

Unit : THB Mil

4,000 FY 07

6,0008,000

8,00010,000

10,00012,000

12,00015,000

15,00020,000

500 -700 Mil.USD

FY 08

III. Increase Outstanding Size

FY 09

FY 10

FY 11

FY 12

150,000200,000

Unit : THB Mil

FY 07

7

50,00080,000 FY 08

FY 13

Tenors: 3-5-7-10 yrs

(by Re-opening)

40,000

15,00020,000

80,000100,000

100,000120,000

100,000120,000

120,000150,000

5-7 Bil.USD

FY 09

FY 10

FY 11

FY 12

FY 13

Keep Our Word to get Investor Confidence for the Plan

Firm Committed Supply of Benchmark Bond Regardless of Budget uncertainty Public Debt Management Office, Ministry of Finance, Kingdom of Thailand

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:

+86%

+33%

420,000 THB Mil. to 670,000 THB Mil. Benchmark Bond

Savings Bond

T-Bill (Outstanding)

THB Mil.

FY2010

Plan

0

Treasury Balance = 417,166 THB Mil.

Benchmark Bond

Non Benchmark Bond

Keep Our Word to get Investor Confidence for the Plan

-45% 154,000

170,000

100,000

+8%

-51% 82,233

(-20%)

+118% 131,000

800,000 THB Mil to 640,000 THB Mil

200,000

60,000

Total Funding needs decreased from:

Actual

281,000

310,000

300,000

Lower Borrowing needs due to Economic Recovery

309,826

0%

approx. -160,000 THB Mil.

Others

321,171

400,000

Non Benchmark Bond

261,171

59%)

(+

Treasury Balance = 278,694 THB Mil.

Savings Bond

T-Bill (Outstanding)

Others

Firm Committed Supply of Benchmark Bond Regardless of Budget uncertainty Bond Market Development Bureau, Public Debt Management Office

Treasury Balance = 510,180 THB Mil.

400,000

Treasury Balance = N/A

Actual

149,110

177,770

34,600

45,000

190,514 40,000

9,000

1,075

54,014

Fixed P/N

-16%

Bank Loan (Outstanding)

200,000

Benchmark Bond

Non Benchmark Bond

Savings Bond

T-Bill (Outstanding)

ILB

Float P/N

Fixed P/N

-92% 30,030

88,249

+96% 45,000

125,122

-13% 52,180

+116%

120,231

-4%

-63% 60,000

0

-44%

30,000

100,000

1,140,000 THB Mil to 750,000 THB Mil

(-34%)

Float P/N

-23%

345,751

330,000

300,000

64,659

Total Funding needs decreased from:

ILB

Plan

199,110

THB Mil.

T-Bill (Outstanding)

THB Mil.

110,850

approx. -390,000

Savings Bond

-72%

+344%

+5%

FY2012 Lower-than-expected Disbursement

Non Benchmark Bond

-38% 125,691

204,000 Benchmark Bond

Actual

400,000

0

-26%

37,359

(- 36%)

100,000

-

Total Funding needs decreased from: 700,000 THB Mil to 450,000 THB Mil

200,000

100,000

THB Mil.

95,000

approx. -250,000

300,000

Plan

-3%

70,000

Higher than expected Revenue collection

349,500

FY2011

THB Mil.

339,900

400,000

Bank Loan (Outstanding)

8

FY2008-FY2012 FY2008-FY2012 Key Success Indicators Key Success Indicators

1. Trading Volume 2. Turnover Ratio 1.

Ratio 3. Trading DemandVolume Concentration 2.

4. Turnover Auction Price Debt Management Office, Ministry of Finance, Kingdom of Thailand 3. DemandPublic Concentration 4. Auction Price

5-yr Benchmark Tenor : Highest Secondary Trading Volume in everyBenchmark year (accounted 25% ofSecondary total trading volume) 5-yr Tenor for : Highest Trading Volume in

every%year (accounted Unit: share of Marketfor 25% of total trading volume) Trading Volume Unit: % share of Market Trading Volume

9 9

7% 7FY07 %

27% 27% 20% 20%

28% 28%

20% 20% 18% 18%

5-yr

5-yr

5-yr

5-yr

5-yr FY08

5-yr FY09

5-yr FY10

5-yr FY11

5-yr

5-yr FY12 (Aug) FY07 FY08 FY09 FY10 FY11 FY12 Top 10 Gov’t Bond Series – Accounted for 90% of all Gov’t (Aug)

Bond trading in Secondary Trading Volume Top 10 Gov’t Bond Series – Accounted for 90% of all Gov’t Bond%trading in Secondary Unit: share of Market Trading Volume Trading Volume Unit: % share of Market 90% Trading Volume

75% 75%

77% 76% 77% 76%

80% 80%

84% 84%

5 yr Benchmark Bond : Higher Turnover Ratio

LB133A LB133A

1.5 1.5

LB133A LB133ALB145B LB145B

3.1 3.1 2.4 2.4

LB155A LB155A

4.2 4.2

LB176A LB176A

LB15DA LB15DA

2.8 2.8

4.0 4.0

FY07 FY08 FY09 FY10 FY11 FY12 (Aug) FY07 FY08 FY09 FY10 FY11 FY12 Well developed Benchmark Bond pays off : Even with greater size (Aug) of issuance, the cost of funding is still at market rate Well developed Benchmark Bond pays off : Even with greater size of issuance, Unit: Billion the USDcost of funding is still at market rate +0.9 bps Unit: Billion USD

90%

+1.4 bps

+1.4 bps

+1.2 bps

12.8 12.8

14.7 14.7

+3.2 bps

+3.2 bps

+0.9 bps 16.5

16.5

13.7 13.7

+1.2 bps

FY07

FY08

FY09

FY10

FY11

FY07

FY08

FY09

FY10

FY11

FY12 (Aug) FY12

(Aug)

9

Public Debt Management Office, Ministry of Finance, Kingdom of Thailand

5 yr Benchmark Bond : Higher Turnover Ratio

7.5 7.5

-0.4 bps

FY08

FY09

-0.4 bps FY10

FY11

FY12 F

FY08

FY09

FY10

FY11

FY12 F

FY2012 Total GOVT Bond = 46 Series

TOP 5

(2,2511,XXX THB Mil)

> 100,000 THB Mil in Size (70% of Trading Volume)

Next 10 > 50,000 THB Mil in Size

(20% of Trading Volume)

Public Debt Management Office, Ministry of Finance, Kingdom of Thailand

Top 5 (>100,000)

FY-to-date Market Share of Trading Volume in Secondary Market (Oct 11-Sept 12)

3 150000

TOP 5

Next 10

3

70% 0

ILB

10%

20% 50

100

5 100000

FY 2012 on-the-run Benchmark Bond

10

7 %

30

%

50

FY2012 Market’s Favorites Classified by Turnover Ratio

LB383A

LB396A

LB145A

LB406A

LB183A

LB13OA

LB244A

LB12NA

LB157A

LB27DA LB27DA

LB143A

LB19DA

LB171A

LB214A

LB316A

LB616A LB616A

LB175A

LB25DA

LB236A

LB191A

LB14DA

LB267A

LB24DA

LB296A

7

LB233A

4

LB137A

16

LB167A

9

LB416A LB416A

7

LB198A

5

LB283A

LB213A

6

LB16NA

LB193A LB193A

10

LB183B

1

LB17OA

7

LB133A

10 5

ILB217A ILB217A

2

LB196A

3

LB176A LB176A

LB145B

3

LB21DA LB21DA

LB155A LB155A

TTM (Year)

LB15DA LB15DA

0

LB165A LB165A

20 FRB 4

15

LB326A LB326A

50000

LB22NA

Outstanding size (THB Mil.)

(50,000-100,000)

10

Next 10 Bottom 30

All 3-5-7-10 on-the-run Benchmark Bond Has Turnover Ratio between 2.5 – 4.0 (while market turnover ratio = 1) Public Debt Management Office, Ministry of Finance, Kingdom of Thailand

Turnover Ratio

FY-to-date Market Share of Trading Volume in Secondary Market (Oct 11-Sept 12)

4 4.0

4.00

4.00

150000

150,000

Outstanding ≥ 100,000 MB Current Outstanding 50,000-100,000 MB Current Outstanding ≤ 50,000 MB FY 2012 on-the-run Benchmark Bond

3.1

3

100000 2.6 2.6

100,000

3.00

3.00

2.00

2.00

1.00

1.00

0.00

0.00

2.5

2

LB21DA

LB155A

LB15DA

LB176A

5

10

3

3

7

LB133A LB27DA LB145B LB17OA ILB217A LB165A LB137A LB326A LB145A LB196A LB12NA LB616A LB236A LB416A LB25DA LB183B

0

0

LB176A LB21DA LB155A LB193A LB15DA LB193A

1

15

10 4

20

LB16NA LB143A LB213A LB296A LB24DA LB233A LB14DA LB316A LB283A LB157A LB167A LB191A LB175A LB244A LB171A LB13OA LB267A LB198A LB183A LB19DA LB406A LB214A LB22NA LB383A LB396A

50000

50,000

50 10 30

Turnover Ratio 0.2 – 1.0

Nearly No Trading

10

ACHIEVEMENTS PUBILC DEBT MANAGEMENT OFFICE INNOVATION INFLATION-LI NKED-BOND PIONEER PDDF CGIF DEDICATION BENCHMARK BOND FISCAL DISCIP LINE COMMMITMENT BOND MARKET DEVELOPMENT ACHIEVEMENTS PUBILC D EBT MANAGEMENT OFFICE INNOVATION INFLATION-LINKED-BOND PIONEER PD DF CGIF DEDICATION BENCHMARK BOND FISCAL DISCIPLINE COMMMITMENT B OND MARKET DEVELOPMENT ACHIEVEMENTS PUBILC DEBT MANAGEMENT OF FICE INNOVATION INFLATION-LINKED-BOND PIONEER PDDF CGIF DEDICATION BE NCHMARK BOND FISCAL DISCIPLINE COMMMITMENT BOND MARKETDEVELOPM ENT ACHIEVEMENTS PUBILC DEBT MANAGEMENT OFFICE INNOVATION INFLATIO N-LINKED-BOND PIONEER PDDF CGIF DEDICATION BENCHMARK BOND FISCAL DI SCIPLINE COMMMITMENT BOND MARKET DEVELOPMENT ACHIEVEMENTS PUBI LC DEBT MANAGEMENT OFFICE INNOVATION INFLATION-LINKED-BOND PIONEER PDDF CGIF DEDICATION BENCHMARK BOND FISCAL DISCIPLINE COMMMITMENT BOND MARKET DEVELOPMENT ACHIEVEMENTS PUBILC DEBT MANAGEMENT OF FICE INNOVATION INFLATION-LINKED-BOND PIONEER PDDF CGIF DEDICATION BE NCHMARK BOND FISCAL DISCIPLINE COMMMITMENT BOND MARKET DEVELOP MENT ACHIEVEMENTS PUBILC DEBT MANAGEMENT OFFICE INNOVATION INFLAT ION-LINKED-BOND PIONEER PDDF CGIF DEDICATION BENCHMARK BOND FISCAL DISCIPLINE COMMMITMENT BOND MARKET DEVELOPMENT ACHIEVEMENTS PU BILC DEBT MANAGEMENT OFFICE INNOVATION INFLATION-LINKED-BOND PIONE ER PDDF CGIF DEDICATION BENCHMARK BOND FISCAL DISCIPLINET COMMMITM ENT BOND MARKET DEVELOPMENT ACHIEVEMENTS PUBILC DEBT MANAGEMEN T OFFICE INNOVATION INFLATION-LINKED-BOND PIONEER PDDF CGIF DEDICATIO N BENCHMARK BOND FISCAL DISCIPLINE COMMMITMENT BOND MARKET DEVE LOPMENT ACHIEVEMENTS PUBILC DEBT MANAGEMENT OFFICE INNOVATION IN FLATION-LINKED-BOND PIONEER PDDF CGIF DEDICATION BENCHMARK BOND FI SCAL DISCIPLINE COMMMITMENT BOND MARKET DEVELOPMENT ACHIEVEMEN TS PUBILC DEBT MANAGEMENT OFFICE INNOVATION INFLATION-LINKED-BOND P IONEER PDDF CGIF DEDICATION BENCHMARK BOND FISCAL DISCIPLINE COMMM ITMENT BOND MARKET DEVELOPMENT ACHIEVEMENTS PUBILC DEBT MANAGE MENT OFFICE INNOVATION INFLATION-LINKED-BOND PIONEER PDDF CGIF DEDI CATION BENCHMARK BOND FISCAL DISCIPLINE COMMMITMENT BOND MARKET DEVELOPMENT ACHIEVEMENTS PUBILC DEBT MANAGEMENT OFFICE INNOVATIO N INFLATION-LINKED-BOND PIONEER PDDF CGIF DEDICATION BENCHMARK BON D FISCAL DISCIPLINE COMMMITMENT BOND MARKET DEVELOPMENT ACHIEVE MENTS PUBILC DEBT MANAGEMENT OFFICE INNOVATION INFLATION-LINKED-BO ND PIONEER PDDF CGIF DEDICATION BENCHMARK BOND ACHIEVEMENTS PUBIL C DEBT MANAGEMENT OFFICE INNOVATION INFLATION-LINKED-BOND PIONEER PDDF CGIF DEDICATION BENCHMARK BOND FISCAL DISCIPLINE COMMMITMENT BOND MARKET DEVELOPMENT ACHIEVEMENTS PUBILC DEBT MANAGEMENT OF 11 FICE INNOVATION INFLATION-LINKED-BOND PIONEER PDDF CGIF DEDICATION BE

C. Bond Supply FY2013 + Funding Needs FY2013 - FY2015 Public Debt Management Office, Ministry of Finance, Kingdom of Thailand

• FY 2013 Total Funding Needs (by Bills)

 1,013,546 THB mil.

• FY 2013 Total Fund Raising (by Instruments)

 1,090,076 THB mil.

• FY 2013 Benchmark Bond (3-5-7-10-15-20-30-50 tenors)

 525,000 THB mil.

• FY 2013’Q1 Government Bond Auction Schedule

 150,500 THB mil.

• Fund Raising Strategies  Building Benchmark Bond to Stabilize Yield Curve  Segmenting Investors Base to Diversify Dependency Risk

•Next Phase of Inflation Linked Bond 

Creating Liquidity & Extending Yield Curve

12

FY2013 Total Funding Needs (By Bills)

1,013,546 THB Mil.

• • • • •

Deficit Deficit Restructuring FIDF Restructuring Water Insurance

300,000 157,503 166,543 340,000 49,500

Public Debt Management Office, Ministry of Finance, Kingdom of Thailand THB Mil.

1,000,000

Deficit Deficit Restructuring FIDF Restructuring TKK TKK Restructuring Water Management Decree Insurance Decree

49,500

TENTATIVE

340,000

750,000 500 10,000

500,000

260,000

340,122

166,543 129,124

58,940 139,171 250,000

25,000

113,014

199,239

52,000

219,222 344,084

232,575

20,838 75,171

157,503

300,000

200,666

200,000 100,000

-

(250,000) Annual Funding Needs (THB Mil.)

FY2010

FY2011

FY2012

FY2013F

FY2014F

FY2015F

656,746

424,620

694,706

1,013,546

528,363

415,234

FY2013 Total Fund Raising Plan

(By Bills)

1,090,076 THB Mil.

• • • • • • •

Deficit Deficit Restructuring FIDF Restructuring Water Insurance Pre-Mature FIDF Pre-Mature TKK

300,000 157,503 166,543 340,000 49,500 57,000 19,530

Public Debt Management Office, Ministry of Finance, Kingdom of Thailand THB Mil.

1,000,000

750,000

500,000

Deficit Deficit Restructuring FIDF Restructuring TKK TKK Restructuring Water Management Decree Insurance Decree Pre-Mature TKK Restructuring Pre-Mature FIDF Conversion T-Bill Conversion (Bill to Bond)

260,000

49,500

TENTATIVE

340,000 500 10,000

340,122

166,543 129,124

58,940 139,171 250,000

25,000

113,014

199,239

52,000

219,222 344,084

232,575

20,838 75,171

157,503

300,000

200,666

200,000 100,000

-

28,309

18,000 5,782

117,600

128,272

FY2010 656,746

FY2011 424,620

FY2012 694,706

863,230

570,529

846,760

124,254

57,000 19,530

82,230 (250,000) Annual Funding Needs (THB Mil.) Annual Fund Raising (THB Mil.)

13

FY2013F

1,013,546 1,090,076

FY2014F

528,363

FY2015F 415,234

528,363

415,234

FY 2013 Total Fund Raising Plan

1,090,076 THB Mil.

(by Instruments and Bills)

Public Debt Management Office, Ministry of Finance, Kingdom of Thailand

Insurance Decree

49,500  Savings Bond  ILB

Water Decree 340,000

Bank Loan 6 mth – 4 yr (Now – June 2013)

 Non-Benchmark

(Mini-Tender)  P/N  Global Bond NEW

457,503

ILB 15 yr SB Float P/N Fixed P/N

Deficit

40,000 6,000 31,503 40,000

300,000 Benchmark Bond (5 - 7 - 15 - 20 - 30 - 50 yr)

340,000

Restructuring 157,503

223,543

Float P/N

FIDF

166,543

Benchmark Bond (3 & 10 yr) 185,000

57,000

Pre-Mature FIDF Pre-Mature TKK

19,530

By Bills

3,543

Other

44,530

ILB 10 yr

10,000

By Instruments To Reach 100,000 THB Mil. in Outstanding Amount by the End of FY2013

ALL FY2013 Benchmark Bond Series (3 – 5 – 7 – 10 – 15 - 20 – 30 - 50 yr + 10 yr ILB)

Public Debt Management Office, Ministry of Finance, Kingdom of Thailand

200,000

3

5

7 FY 2013 Indicative Benchmark Bond

TENTATIVE

Plan-to-issue Amount in FY2013 80,000 ILB 10

40000 41,205 LB616A

40,000

50

53,436

50,000 35,000 LB326A

50,000

20

35,000

LB236A

LB21DA

44,000

111,110 90,872 ILB217A

-

15

LB27DA

10,000 99,994 LB196A

50,000

100,000

(3.3 bil.USD)

30 85,000

100,000

100,000

LB416A

90,000

10

LB176A

Outstanding size (THB Mil.)

150,000

90,000

Outstanding Amount as of the beginning of FY2013

14

15

25,000 3.65% 17-Dec-21

13,500 3.625% 16-Jun-23

13,500

LB236A

18,000 3.58% 17-Dec-27

9,000

9,000

LB27DA

10,000 3.775% 25-Jun-32

10,000

LB326A

7,500

LB416A

15,500 3.80% 14-Jun-41

10,000 1.20% 14-Jul-21

13,000

12,000

LB21DA

30,500 3.25% 16-Jun-17

13,000 3.875% 13-Jun-19

10,000

ILB217A

8,000

13,000

LB196A

19,000

11,500

LB176A

Government Bond Auction Schedule for Q1/FY2013

Website http://www.pdmo.go.th/

8. LB416A = พันธบั ตรรัฐบาลเพื่อการบริห ารหนี้ ในปี งบประมาณ พ.ศ. 2556 ครัง้ ที่ 1 / พันธบั ตรรัฐบาล ในปี งบประมาณ พ.ศ. 2556 ครัง้ ที่ 5 (Re-open พันธบั ตรรัฐบาล ในปี งบประมาณ พ.ศ. 2554 ครัง้ ที่ 2)

7. LB326A = พันธบั ตรรัฐบาล ในปี งบประมาณ พ.ศ. 2556 ครัง้ ที่ 4 (Re-open พันธบั ตรรัฐบาลเพื่อการปรับ โครงสร้างหนี้ (พ.ร.ก. ให้ อานาจกระทรวงการคลังกูเ้ งินฯ พ.ศ. 2552) ในปี งบประมาณ พ.ศ. 2555 ครัง้ ที่ 1)

6. LB27DA = พันธบั ตรรัฐบาล ในปี งบประมาณ พ.ศ. 2556 ครัง้ ที่ 1 (Re-open พันธบั ตรรัฐบาล ในปี งบประมาณ พ.ศ. 2555 ครัง้ ที่ 3)

ในปี งบประมาณ พ.ศ. 2553 ครัง้ ที่ 1)

5. LB236A = พันธบั ตรรัฐบาลเพื่อการปรับ โครงสร้างหนี้ (พ.ร.ก. ช่วยเหลือกองทุ นเพื่อการฟื้นฟูฯ ระยะที่สอง ) ในปี งบประมาณ พ.ศ. 2556 ครัง้ ที่ 2 (Re-open พันธบั ตรรัฐบาลเพื่อการปรับ โครงสร้างหนี้ (พ.ร.ก. ช่วยเหลือกองทุ นเพื่อการฟื้นฟูฯ ระยะที่สอง )

4. LB21DA = พันธบั ตรรัฐบาล ในปี งบประมาณ พ.ศ. 2556 ครัง้ ที่ 3 (Re-open พันธบั ตรรัฐบาล ในปี งบประมาณ พ.ศ. 2554 ครัง้ ที่ 4)

3. ILB217A = พันธบั ตรรัฐบาลประเภทอัตราดอกเบี้ยแปรผันตามการเปลี่ยนแปลงของเงินเฟ้อ ในปี งบประมาณ พ .ศ. 2556 ครัง้ ที่ 1 (Re-open พันธบั ตรรัฐบาลประเภทอัตราดอกเบี้ยแปรผันตามการเปลี่ยนแปลงของเงินเฟ้อ ในปี งบประมาณ พ .ศ. 2554)

2. LB196A = พันธบั ตรรัฐบาลเพื่อการบริห ารหนี้ ในปี งบประมาณ พ.ศ. 2556 ครัง้ ที่ 2 (Re-open พันธบั ตรรัฐบาล ในปี งบประมาณ พ.ศ. 2552 ครัง้ ที่ 13)

ในปี งบประมาณ พ.ศ. 2555 ครัง้ ที่ 2)

หมายเหตุ : 1. LB176A = พันธบั ตรรัฐบาลเพื่อการปรับ โครงสร้างหนี้ (พ.ร.ก. ช่วยเหลือกองทุ นเพื่อการฟื้นฟูฯ ระยะที่สอง ) ในปี งบประมาณ พ.ศ. 2556 ครัง้ ที่ 1 (Re-open พันธบั ตรรัฐบาลเพื่อการปรับ โครงสร้างหนี้ (พ.ร.ก. ช่วยเหลือกองทุ นเพื่อการฟื้นฟูฯ ระยะที่สอง )

03-Oct-12 10-Oct-12 17-Oct-12 24-Oct-12 31-Oct-12 07-Nov-12 14-Nov-12 21-Nov-12 28-Nov-12 05-Dec-12 12-Dec-12 19-Dec-12 26-Dec-12 Total Coupon Maturity Date

Auction date

Exclusivity MoF Outright PD Only

15,000 4.85% 17-Jun-61

7,000

8,000

LB616A

11,500 17,000 22,000 21,000 23,000 7,000 22,000 27,000 150,500

Total

Unit: THB Mil.

TTM (Yrs.)

Symbol T-BILL1M T-BILL3M T-BILL6M T-BILL1Y LB13OA LB143A LB145B LB145A LB14DA LB155A LB157A LB15DA LB167A LB16NA LB171A LB175A LB176A LB17OA LB183A LB183B LB191A LB193A LB196A LB198A LB19DA LB213A LB214A LB21DA LB22NA LB233A LB236A LB244A LB24DA LB25DA LB267A LB27DA LB283A LB296A LB316A LB326A LB383A LB396A LB406A LB416A LB616A

Avg. Bidding Yield (%) 2.923841 3.024104 3.046427 3.037068 3.113636 3.147273 3.153636 3.158182 3.173636 3.171364 3.194545 3.182727 3.250909 3.270000 3.304545 3.311818 3.288182 3.332727 3.404545 3.408182 3.467273 3.453636 3.481818 3.511818 3.523636 3.544545 3.555455 3.509091 3.592727 3.631818 3.612727 3.698182 3.719091 3.777273 3.797273 3.812727 3.882727 3.926364 3.982727 4.020909 4.077273 4.110909 4.144545 4.196364 4.302727

Avg. Bid-Offer Spread (bp)

Change Yield (bp) 2 1 1 2 0 0 0 0 0 0 0 0 0 0 0 -1 -2 -1 -1 -1 -1 -2 -3 -3 -2 -2 -2 -3 -1 -1 -2 0 -1 -2 -2 -2 -1 -1 0 0 0 0 1 0 -1

4 3 3 3 5 6 3 4 5 2 5 3 5 6 5 5 2 4 6 6 6 3 5 6 6 6 6 3 7 6 4 8 8 7 7 7 7 7 7 7 8 8 8 10 10

Maturity

17/10/2013 05/03/2014 12/05/2014 14/05/2014 03/12/2014 22/05/2015 07/07/2015 11/12/2015 27/07/2016 18/11/2016 18/01/2017 26/05/2017 16/06/2017 10/10/2017 07/03/2018 13/03/2018 12/01/2019 08/03/2019 13/06/2019 13/08/2019 03/12/2019 31/03/2021 09/04/2021 17/12/2021 08/11/2022 13/03/2023 16/06/2023 09/04/2024 20/12/2024 12/12/2025 07/07/2026 17/12/2027 13/03/2028 22/06/2029 20/06/2031 25/06/2032 13/03/2038 13/06/2039 22/06/2040 14/06/2041 17/06/2061

TTM (yrs.)

0.076712 0.249315 0.498630 1.000000 1.043836 1.424658 1.610959 1.616438 2.172603 2.638356 2.764384 3.194520 3.821918 4.134246 4.301370 4.652055 4.709589 5.027397 5.432877 5.449315 6.284932 6.435616 6.701370 6.868493 7.175343 8.501369 8.526028 9.216438 10.109590 10.452050 10.712330 11.528770 12.227400 13.205480 13.772600 15.219180 15.457530 16.734250 18.728770 19.745200 25.463010 26.715070 27.742470 28.720550 48.742470

0.08 0.25 0.50 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48

Yield (%) 2.92 3.02 3.05 3.04 3.17 3.19 3.26 3.33 3.45 3.52 3.54 3.52 3.58 3.64 3.71 3.77 3.80 3.81 3.90 3.93 3.96 3.99 4.02 4.03 4.04 4.05 4.06 4.07 4.09 4.12 4.16 4.20 4.20 4.21 4.21 4.22 4.22 4.23 4.24 4.24 4.25 4.25 4.26 4.26 4.27 4.27 4.28 4.28 4.29 4.29 4.30

FY2013 Indicative Benchmark Bond

Remark 1) The above yields are based upon average bids quoted by primary dealers .

2) Average bidding yields of 1-month, 3-month, 6-month and 1-year T-bills are bond equivalent yield converted from average simple yields.

3) Spreads (bp) are differences bid and offer yields.

4) The cut-off time for daily quotation of T-bills and Government bonds is 16:00.

5) The highlighted rows are on-the-run benchmark bond.

16

• Building Benchmark Bond to Stabilized Yield Curve • Diversifying Investor Base to Reduce Dependency Risk

Fund Raising Plan Strategies

Public Debt Management Office, Ministry of Finance, Kingdom of Thailand

Well Diversified Investors Ensures Funding Needs

FY 2013 Full Capacity* : 1,150,000 THB Mil Full Capacity* of All Government Funding Instruments

1,150,000 THB Mil.

Potential Demand for Gov’t Bond 2013

* Under favorable market liquidity + using All funding instruments

THB Bil.

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 7

LB 5/10 ILB

NR 10%

30

SB

15

10

Benchmark Bond

~600,000 THB Mil. (52%)

Savings Bond

~100,000 THB Mil. (9%)

Promissory Note

~100,000 THB Mil. (9%)

Household and Non-profit

Fixed Rate Promissory Note ~50,000 THB Mil. (4%)

5 3

Inflation-Linked Bond

~50,000 THB Mil. (4%)

Floating Rate Bond

~50,000 THB Mil. (4%)

Bank Loan

Total

~200,000 THB Mi (18%)

Equiv. 34,000 THB Mil Soft Loans JBIC ADB IBRD Other

Bank loan FRB / LB

- Life Insurance - Pension Funds

450

Depository Corporations

450

- Retail - Non-profit org.

200

Non-Residence

?

Source : CB (30 June 2012)

Equiv. 47,000 THB Mil (1.4% of Gov’t Debt) Equiv. 13,000 THB Mil

9% 39%

1,150,000 THB Mil. (100%)

Outstanding of Foreign Debt

Commercial Papers Samurai bond 5 yr 20,000 Yen Mil Samurai bond 7 yr 10,000 Yen Mil MTN 40 USD Mil

32% Depository Corporation

* Under favorable market liquidity + using All funding instruments

62,500 Yen Mil 200 USD Mil 63 USD Mil 19 USD Mil (as of Jun 2012)

17

Insurance and Other Corporation

50

20

P/N LB

CB 10%

• To diversify portfolio of government debt • To keep the presence of KOT Bond (Kingdom of Thailand) in the foreign market • 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) Public Debt Management Office, Ministry of Finance, Kingdom of Thailand

Format Currency Tenor

Capital Indexed Bond (with Principle Protection) Thai Baht 10 years

Programme Size Interest Payment

40,000 THB Mil. (1.3 bil USD equiv.)

Every 6 months

Index Indexation Lag Index Ratio

Headline CPI 3 months CPIt /CPI0 (TBMA’s calculation)

Real Yield Repayment Method

1.2 Bullet

PD’s responsibility

Local Institutions

15,000 MB

20,000 MB

5,000 MB

Subscription : approx. 1.6 times

Next Step Continuing Issuance

Allocations Foreign Institutions

Local Retail

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

8 International AWARDS

+

2 Domestic AWARDS

 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  Deal of the Year 2011  Most Creative Issue 2011

Enhance Liquidity

: Asiamoney Awards : Asiamoney Awards : FinanceAsia Achievement Awards : FinanceAsia Achievement Awards : IFRAsia Asia Awards : Euro Money : Asset Asian Awards 2011 : Euroweek Asia : ThaiBMA : ThaiBMA

Next Phase of Inflation Linked Bond in FY2013

• Enhance Liquidity of 10-yr • Extending Yield Curve to 15-yr • PDS’ Responsibilities As Market Marker

Public Debt Management Office, Ministry of Finance, Kingdom of Thailand

Keep Our Promise

10-yr ILB (ILB217A)

• Continue to re-open ILB217A in Q1/FY’13 to build up outstanding size of 100,000 THB Mil.

Extending Yield Curve

New 15-yr ILB

• Build Up ILB new tenor to around 40,000 THB Mil. (Syndication & Auctions)

Fund Raising Instrument for Water Decree • Option A : Issue new tenor of ILB • Option B : Re-open the existing tenor

PDS’ RESPONSIBILITIES

By June 2013 • New 5-yr ILB (Q3/FY’13) • Top-up Existing Tenor

Up To 60,000 THB Mil.

• Participate in the Primary Market • Provide Bid – Offer Price 18

D. Well-Developed Bond Market Improved Government Debt Profile Public Debt Management Office, Ministry of Finance, Kingdom of Thailand

• Public Debt Outstanding (as of Dec 2011) = 4.8 THB Trillion (42% of GDP) • Total GOV’T Debt (Direct + FIDF) • Average-Time-to-Maturity (ATM) • Average Cost • Fixed : Float

= 3.46 THB Trillion (71% of Public Debt) = 7yrs 6mths = 4.4% = 86 : 14

• Well-Developed Bond Market Improved GOV’T Direct Debt Profile Dramatically • Average-Time-to-Maturity (ATM) = 8yrs 9mths • Average Cost = 4.2% • Fixed : Float Ratio = 87 : 13 • Maturity Distribution Profile = 50-20-30

• Full Capacity of All Government Funding Instruments (FY2013)  1,150,000 THB Mil

• Maturity Profile of GOV’T Funding Instruments (Strategic Framework) • Average-Time-to-Maturity (ATM) • Fixed : Float • Maturity Distribution Profile

19

= 9yrs = 70 : 30 = 50-30-20

Public Debt Outstanding (as of Jun 2012) = 4.8 THB Trillion (42% of GDP) Public Debt Management Office, Ministry of Finance, Kingdom of Thailand

Components of Public Debt

Units : THB Mil.

1. Government Debt (excluded FIDF)

2,259,073**

2. Government Debt (for FIDF)

1,247,276**

3. Non-Financial State Enterprise Debt

1,028,750

4. Special Financial Institutions Guaranteed Debt 5. Autonomous Agency Debt (VP and EFPO)

Public Debt Outstanding (as of Jun 2012) *Including 47,275 THB Mil. of External Debt **Including 113,800 THB Mil. of Prefunding

Special Financial Institution Guaranteed Debt

5

% 0.25 THB Trillion

Autonomous Agency Debt (VP and EFPO)

1

% 0.01 THB Trillion

246,437 10,000

4,791,536 Non-Financial State Enterprise Debt

21%

GOV’T Debt

1.03 THB Trillion

GOV’T Debt

47% 2.26 THB Trillion

(for FIDF)

26% 1.25** THB Trillion

020

As of June 2012  Average-Time-to-Maturity (ATM) = 7yrs 6mths  Average Cost = 4.4%  Fixed : Float = 86 : 14 As of Jun 2012

Total GOV’T Debt = 3.46* THB Trillion (71% of Public Debt) * Excluded 47,275 THB Mil. of Foreign Debt

Public Debt Management Office, Ministry of Finance, Kingdom of Thailand Assumptions : 6 months BIBOR = 3.23%, 6 months Fixed Deposit Rate = 2.55%

FIDF 1

 ATM = 5yrs 4mths  Avg. Cost = 4.8%  Fixed : Float = 81 : 19

FIDF 3

300,000

46,000

GOV’T Debt (for FIDF) = 1.25* THB Trillion

45%

14,000

69,000

next 5 yrs

year 6 - 10

10yrs +

35,000

32,000

40,000

86,800 37,900

75,000

71,003

5% 25,000

-

39,836

64,124 65,000

58,440

98,320

100,000

16,731

162,099

211,023

200,000

Maturity Profile

50%

TTM Fiscal Year

**Including 113,800 THB Mil. of Prefunding

Budget Deficit

On-lending Loan

Insurance Decree

4,747

20%

15,700

year 6 - 10

10yrs + 28,205

27,800

20,000

47,436

5,500

5,000

6,500

23,000

next 5 yrs

41,900

88,950

50,000

47,000

43,000

-

Maturity Profile

0000 30%

18,900 32,500

96,110

77,180

86,632

145,994

GOV’T Debt (exclude FIDF) = 2.21*** THB Trillion 76,700

10,000

86,630 93,830

157,000

 ATM = 8yrs 9mths  Avg. Cost = 4.2%  Fixed : Float = 87 : 13

50% 16,000

219,222

78,170 90,000

100,000

201,770

232,003 30,360

200,000

8,000

58

300,000

TKK

TTM Fiscal Year

***Excluded 47,275 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

Public Debt Management Office, Ministry of Finance, Kingdom of Thailand

As of Dec 2007

As of Jun 2012 ATM

Average-Time-to-Maturity LENGTHENED by 3 ½ yrs

8yrs 9mths ATM

5yrs 3mths

Avg. cost

Avg. Cost LOWERED by 30 bps

4.5%

.

Avg. cost

(While ATM Lengthened by 3 ½ yrs)

4.2% Float

Well-Balanced Fixed/Float Ratio (Target : Fixed/Float ratio = 80 : 20)

10%

Float

Fixed

Fixed

90%

87%

Maturity Profile as of Dec 2009

Well-Distributed Maturity Profile

61%

Target Reached : Maturing Debt in the next 5 yrs is less than 50% of Total Debt

Maturity Profile as of Jun 2012

50% 24%

next 5 yrs

21

13%

year 6 - 10

20%

15% 10yrs +

next 5 yrs

year 6 - 10

30% 10yrs +

Full Capacity* of All Government Funding Instruments

1,150,000 THB Mil. ($40 Bil.)

* Under favorable market liquidity + using All funding instruments

Public Debt Management Office, Ministry of Finance, Kingdom of Thailand

LB 3 yr

150,000 THB Mil. ($5 bil.)

LB 5 yr

120,000 THB Mil. ($4 bil.)

LB 7 yr

80,000 THB Mil.

($3 bil.)

LB 10 yr

80,000 THB Mil.

($3 bil.)

LB 15 yr

60,000 THB Mil.

($2 bil.)

LB 20 yr

60,000 THB Mil.

($2 bil.)

LB 30 yr

30,000 THB Mil.

($1 bil.)

LB 50 yr

20,000 THB Mil.

($0.8 bil.)

Benchmark Bond 7

50

30 20

Funding Instruments

15

10

5 3

($20 bil.)

Benchmark Bond

~600,000 THB Mil. (52%)

($3 bil.)

Savings Bond

~100,000 THB Mil. (9%)

($3 bil.)

Promissory Note

~100,000 THB Mil. (9%)

($1.5 bil.)

Fixed Rate Promissory Note ~50,000 THB Mil. (4%)

($1.5 bil.)

Inflation-Linked Bond

~50,000 THB Mil. (4%)

($1.2 bil.)

Floating Rate Bond

~50,000 THB Mil. (4%)

($7 bil.)

Bank Loan

($40 bil.)

Total

FY2012 Maturity Profile of GOV’T Funding Instruments (Strategic Framework)

~200,000 THB Mi (18%)

1,150,000 THB Mil. (100%)

(A) ATM = 9 yrs (B) Fixed : Float = 70 : 30 (C) Maturity Distribution Profile 50 - 30 - 20 Public Debt Management Office, Ministry of Finance, Kingdom of Thailand

50% (≤ 5 yrs)

Benchmark Bond

580,000 THB Mil 150,000

ATM Cost (Avg. past 3 yrs) Fixed : Float

350,000 THB Mil

10yrs 8mths +5 bps 100 : 0

20% (≥ 11 yrs) 220,000 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

15

20

25

7yrs 2mths + 80 bps 65 : 35

30

40

10 11

15

20

25

 Not-to-Collide with Benchmark Tenors

30

30,000

10,000

6

10,000

50,000

5

25,000

25,000

1

25,000

-

ILB

50,000 25,000

50,000

1

50,000 10,000

100,000

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

22

ACHIEVEMENTS PUBILC DEBT MANAGEMENT OFFICE INNOVATION INFLATION-LI NKED-BOND PIONEER PDDF CGIF DEDICATION BENCHMARK BOND FISCAL DISCIP LINE COMMMITMENT BOND MARKET DEVELOPMENT ACHIEVEMENTS PUBILC D EBT MANAGEMENT OFFICE INNOVATION INFLATION-LINKED-BOND PIONEER PD DF CGIF DEDICATION BENCHMARK BOND FISCAL DISCIPLINE COMMMITMENT B OND MARKET DEVELOPMENT ACHIEVEMENTS PUBILC DEBT MANAGEMENT OF FICE INNOVATION INFLATION-LINKED-BOND PIONEER PDDF CGIF DEDICATION BE NCHMARK BOND FISCAL DISCIPLINE COMMMITMENT BOND MARKETDEVELOPM ENT ACHIEVEMENTS PUBILC DEBT MANAGEMENT OFFICE INNOVATION INFLATIO N-LINKED-BOND PIONEER PDDF CGIF DEDICATION BENCHMARK BOND FISCAL DI SCIPLINE COMMMITMENT BOND MARKET DEVELOPMENT ACHIEVEMENTS PUBI LC DEBT MANAGEMENT OFFICE INNOVATION INFLATION-LINKED-BOND PIONEER PDDF CGIF DEDICATION BENCHMARK BOND FISCAL DISCIPLINE COMMMITMENT BOND MARKET DEVELOPMENT ACHIEVEMENTS PUBILC DEBT MANAGEMENT OF FICE INNOVATION INFLATION-LINKED-BOND PIONEER PDDF CGIF DEDICATION BE NCHMARK BOND FISCAL DISCIPLINE COMMMITMENT BOND MARKET DEVELOP Y 2012 HIGHLIGHTS MENT ACHIEVEMENTS PUBILC DEBT MANAGEMENT OFFICE INNOVATION INFLAT ION-LINKED-BOND PIONEER PDDF CGIFfiscal DEDICATION BOND FISCAL  FIDF Decree passed : reduced burden byBENCHMARK 70,000 MB a year (though DISCIPLINEPublic COMMMITMENT BOND MARKET DEVELOPMENT ACHIEVEMENTS PU Debt remains unchanged) BILC DEBT  MANAGEMENT INNOVATION INFLATION-LINKED-BOND PDDF activated OFFICE : restructuring of FIDF’s 340,122 MB saved over 7,000 PIONE MB ER PDDF CGIF DEDICATION BENCHMARK BOND FISCAL DISCIPLINET COMMMITM a year & enhanced overall FIDF portfolio profile ENT BONDMARKET DEVELOPMENT ACHIEVEMENTSASEAN+3 PUBILC issuers DEBT MANAGEMEN CGIF activated : to enable investment-grade to access T OFFICE INNOVATION INFLATION-LINKED-BOND PIONEER PDDF CGIF DEDICATIO foreign currency bond markets N BENCHMARK BOND13FISCAL DISCIPLINE COMMMITMENT MARKET  Founding MOF-outright PD : upgrading PD dutiesBOND & privileges to DEVE LOPMENT actively ACHIEVEMENTS DEBT MANAGEMENT OFFICE INNOVATION IN play role asPUBILC market makers FLATION-LINKED-BOND PIONEER PDDF DEDICATION BOND FI  Electronic Retail Savings BondCGIF : to promote savingsBENCHMARK society & to diversify SCAL DISCIPLINE COMMMITMENT Gov’t funding instruments BOND MARKET DEVELOPMENT ACHIEVEMEN TS PUBILC DEBT MANAGEMENT OFFICE INNOVATION INFLATION-LINKED-BOND P IONEER PDDF CGIF DEDICATION BENCHMARK BOND FISCAL DISCIPLINE COMMM ITMENT BOND MARKET DEVELOPMENT ACHIEVEMENTS PUBILC DEBT MANAGE MENT OFFICE INNOVATION INFLATION-LINKED-BOND PIONEER PDDF CGIF DEDI CATION BENCHMARK BOND FISCAL DISCIPLINE COMMMITMENT BOND MARKET DEVELOPMENT ACHIEVEMENTS PUBILC DEBT MANAGEMENT OFFICE INNOVATIO N INFLATION-LINKED-BOND PIONEER PDDF CGIF DEDICATION BENCHMARK BON D FISCAL DISCIPLINE COMMMITMENT BOND MARKET DEVELOPMENT ACHIEVE MENTS PUBILC DEBT MANAGEMENT OFFICE INNOVATION INFLATION-LINKED-BO ND PIONEER PDDF CGIF DEDICATION BENCHMARK BOND ACHIEVEMENTS PUBIL C DEBT MANAGEMENT OFFICE INNOVATION INFLATION-LINKED-BOND PIONEER PDDF CGIF DEDICATION BENCHMARK BOND FISCAL DISCIPLINE COMMMITMENT BOND MARKET DEVELOPMENT ACHIEVEMENTS PUBILC DEBT MANAGEMENT OF 23 FICE INNOVATION INFLATION-LINKED-BOND PIONEER PDDF CGIF DEDICATION BE

F

FIDF Decree Passed PDDF Activated

Special Financial Institutions Guaranteed Debt 195,230 MB

Non-Financial State Enterprise Debt 1,033,898MB

Other State Agencies , 8,820MB

GOV'T Debt 2,215,727MB

GOVT Debt (for FIDF) 1,133,973MB

1,500,000

1,000,000

FIDF1 = 500,000MB

FIDF1 = 463,275MB FIDF2 = 112,000MB

-

500,000

393,535 MB FIDF3 = 693,327MB

FIDF3 = 669,857MB

13,789 MB 263,178MB

-

FIDF principle debt at initial period (FY'1997,2002)

FIDF principle debt outstanding at end of FY'2012

cummulative interest payment at end of FY'2012

24

Interest Payment Reduced ~70,000 THB Mil. a Year

FIDF Decree Passed

(Although Public Debt Unchanged, Fiscal Room Freed up by 5%) Public Debt Management Office, Ministry of Finance, Kingdom of Thailand

300,000

THB Mil.

% Share of Total Budget Expenditures

15%

Interest Payment for FIDF Debt

Interest Payment for GOV’T Debt Principle Repayment for GOV’T Debt

12%

% Share of Allocated Principle & Interest to Budget Expenditures

11% 200,000

10%

9% 8% 7% 5% 4%

-

68,424

66,540

68,907

66,485

69,679

69,217

66,917

57,719

58,233

42,955

46,537

35,870

39,125

5%

50,000

100,000

FIDF Interest Payment

0%

2013F

What Can We Do with 70,000 THB Mil. A Year?

Option 1 : To Strengthen Economic Growth Option 2 : To Strengthen Fiscal Discipline Public Debt Management Office, Ministry of Finance, Kingdom of Thailand

% Share of Total Budget Expenditures

41%

Option 1 : Increase Investment Budget

25% 19% 13% % Shares of Investment Budget to Budget Expenditures

% Share of Total Budget Expenditures

Increase Principle Repayment Budget 25

3%

3%

3%

2.3%

2.6%

0.06%

1%

UNPAID

Option 2 :

PAID

5%

5% % Share of Allocated Principle Repayment to Budget Expenditures (Paid Debt) 10%

% Share of Unallocated Principle Repayment to Budget Expenditures (Rollovered Debt)

8%

7%

PDDF Activated

Restructuring FIDF 340,122 THB Mil. * Saved Over 7000 MIL THB a Year ( 340,122THB Mil. = 30% of 1,142,101 THB Mil. Total FIDF Debt Outstanding) Bond Market Development Bureau, Public Debt management Office

PDDF : Public Debt Restructuring and Domestic Bond Market Development Fund

~3.4

~5.7

%

%(avg. cost)

400,000

5.4%

5,000

SB128A

4.5% LB133A

40,000

R-bill 6M

5,000

P/N 6 yrs FRB 4 yrs LB 7 yrs

18,000 10,000 12,000

P/N 6 yrs

39,000

P/N 6 yrs

50,099

R-bill 3M

23,245

R-bill 6M

48,105

~3.09% ~3.63% ~3.08% ~3.45%

5.375%

300,000

P/N 6 yrs

LB11NA

39,000

Saved ~2.3%

89,099 6.1%

200,000

~3.01%

R-bill 3M

19,000

R-bill 6M

52,350

FRB 4 yrs

14,450

FRB 4 yrs

14,450

LB 5 yrs

46,000

LB 5 yrs

46,000

LB 7 yrs

20,000

LB 7 yrs R-bill 6M

20,000 7,223

Total Pre-Funding : 190,800MB

LB 5 yrs

20,000

Positive Carry = 57 MB

LB 7 yrs LB 10 yrs

15,000 12,000

100,000

(7 THB Bil. a Year)

~3.25%

SB129A

206,023 -

~3.625%

*Excluded 18,000 Pre-Mature FIDF Debt Restructuring in 2012

Total Pre-Funding : 190,800MB Strategies in managing FIDF’s Result : 64 MB (3bps) 340,122MB* in 2012 *Excluded 18,000MB of Pre-Mature FIDF Debt Restructuring in 2012

Relatively Shorter..

Partially Float..

Partially Callable..

LB 3-10yr

to Allow Flexibility to Reflect Market Rate to Prepare for Early-Repayment

FRB / R-bill P/N

Bond Market Development Bureau, Public Debt management Office

(4,200 – 4,136)

400,000

Post 2012 Checklist

200,000

340,122

300,000

7mths 67 bps 3% 9%

THB Mil

Beginning FY2012 Ending FY2012 Result ATM 4yrs 8mths 5yrs 3mths Lengthen by Cost 5.1% 4.5% Lowered by Fixed : Float 82 : 18 79 : 21 Float Increased Callable Proportion 10% 19% Callable Rose NO Refinancing Risk : Yearly Maturing Debt < 250,000 THB Mil

107,099

60,328 24,450

100,000

66,000 47,000

23,245 129,124

64,970

109,000

100,000

95,014

12,000

75,171 55,000

54,800 37,900

49,000 32,000

-

26

CGIF Activated

CGIF is guaranteed by ASEAN + 3 ď&#x192;¨ Rising Giant

24

31

%

($6,865 mln)

($69.6 trln)

%

($2,133 mln)

Population

GDP

46

%

($16.4 trln)

($8.6 trln)

Trade ($18.9 trln)

Source: IMF and World Trade Organization

Objectives

Functions

1) 2) 3)

To develop deep and liquid local currency and regional bond markets To enable investment-grade ASEAN+3 issuers to access local currency bond markets to promote the issuance of debt securities with longer term maturities to match the gestation of investment projects

1)

Guaranteeing bonds that are denominated in local currencies and issued by ASEAN+3 entities rated investment-grade 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 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 Undertaking such other activities and providing such other services consistent with CGIF objectives

2)

3)

4)

Benefits

1) 2) 3)

27

A reduction of cost of financing of issuers An efficient fund raising and a conformity with financial requirement of the business A reduction of currency & Maturity Mismatch

Linking CGIF & BAHT BOND to the Development of Bond Market Bond Market Development Bureau, Public Debt Management Office

BAHT BOND

Total Outstanding THB 8.2 TRN.

CGIF

(71% of GDP )

94 BB

as of 31 Aug 2012

4 BB

CGIF 1%

Baht Bond 2012 2013 2014 2015 2016 2017 2018 2019

Corp Bond

19%

IBRD

7%

SOE Bond

Natural hedging

2005 2006 2007 2008 2009 2010 2011 2012

KEXIM

Invâ&#x20AC;&#x2122;t Grade

?

(20,700 m)

35%

BOT Bond

SEK

Hana (18,000 m)

Woori CABEI

Targeted industry

IBK (12,300 m)

AFD

Citi

KDB ING

(11,553 m)

ADB

(10,000 m)

(10,500 m)

38%

GOVERNMENT Bond

ASEAN

Thai Corporate

Global issuers

Domestic Bond Mkt

Who is Eligible for CGIF Guaranteed?

ALL current issuers of corporate bonds Public Debt Management Office, Ministry of Finance

Corporate Bonds (less commercial paper) = THB1.3 trillion (16% of Bond Market at THB 8.3 trillion As of 31 Aug 2012) Source: ThaiBMA

By Business Sector

By Rating

Agri Other

Unrated

ICT 2% 5% Trans 3% 5%

Petro

Cost Saving

24%

5%

Food 6% Fin 8%

BBB 10%

Energy

Bank 21%

Conmat Prop 9% 10%

AAA 19%

A

AA

44%

27%

500

350

300

bps

125

200

BBB

bps

100

170

A

GOVT

bps

50 31/5/2012

30/4/2012

30/3/2012

Aug 2012 29/2/2012

31/1/2012

30/12/2011

30/11/2011

30/9/2011

31/10/2011

31/8/2011

29/7/2011

30/6/2011

2011

31/5/2011

29/4/2011

31/3/2011

28/2/2011

31/1/2011

30/12/2010

30/11/2010

30/9/2010

29/10/2010

31/8/2010

30/7/2010

30/6/2010

2010 31/5/2010

30/4/2010

31/3/2010

26/2/2010

29/1/2010

30/12/2009

30/11/2009

30/9/2009

31/10/2009

31/8/2009

31/7/2009

30/6/2009

2009

29/5/2009

30/4/2009

31/3/2009

27/2/2009

30/1/2009

30/12/2008

30/9/2008

2008

28/11/2008

bps 31/10/2008

0

29/8/2008

Bps (above 5-yr Government Bond)

400

28

Founding 13 MOF-outright PD

Deputy Prime Minister and Finance Minister Kittiratt Na-Ranong presented the Ministry of Finance Outright Primary Dealer (MOF OUTRIGHT PD) certificates to 13 financial institutions on 29

August 28, 2012, at Vayupaksa 4, Ministry of Finance.

Upgrading Primary Dealer System

MOF Outright PD Public Debt Management Office, Ministry of Finance, Kingdom of Thailand

1. Bangkok Bank PCL.

2. BNP Paribas, Bangkok Branch 3. Citibank N.A., Bangkok Branch 4. Deutsche Bank AG., Bangkok Branch 5. The Hongkong and Shanghai Banking Corporation Limited 6. JPMorgan Chase Bank, Bangkok Branch 7. Kasikornbank PCL. 8. KGI Securities (Thailand) PCL. 9. Krung Thai Bank PCL.

10. The Royal Bank of Scotland N.V., Bangkok Branch 11. Siam Commercial Bank PCL. 12. Standard Chartered Bank (Thai) PCL. 13. TMB Bank PCL.

To ensure efficient market Duties, Privileges and Monitoring making activities Public Debt Management Office, Ministry of Finance, Kingdom of Thailand

Duties 1. Primary Market

 Maintain at least 5% share of total issue size of selected tenor  Participate in every auction  Submit bid at least 10% for exclusivity tenor

2. Secondary Market

3. Bond Market Development

Maintain at least 5% share of Being MOF, Stock exchange of Thailand, BOT and ThaiBMA market trading value Partner in developing bond market  Submit daily end-of-day price to ThaiBMA

Selected LB: 3 yr (LB176A) 5 yr (LB196A) 7 yr (LB21DA) 10 yr (LB236A) and ILB

Privileges  Exclusivity in 5-yr tenor  BOT outright counterparty  MOF Preferred Counterparty

 Partnership with MOF  Benefit from Incentive program of Thailand stock Exchange

Monitoring  Yearly Evaluation (fiscal year) with half-year review  Regular one-on-one or one-on-group meeting 30

Electronic Retail Savings Bond

Accessible Savings for All and Promoting Thailand Towards Saving Society

Retail Bond Distribution Classified by Region

Well-Diversified Investor Base

NE 7%

N 8% 7% S

Bangkok and Central

78%

Depository Corporation

Household and Non-profit

9%

39%

NR 10% CB 10%

Insurance and Other Corporation

Government Debt Securities Classified by Types of Investors

Improve Infrastructure to Develop Country  Tram System  Transportation System  Infrastructure System  Energy System  Telecommunication System

32% Electronic Retail Savings Bond

Bond Market Deepening

 Enhance Liquidity in Secondary Market  Promote Scripless Trading system  Alternative Instrument for Micro-Savers

31

•

5 Innovations towards Sustainable Development

5Ds

Past (1997 – 07)

Dynamic

Present (2008 – 2012)

200

2007 %

%

%

Fixed

Features

Interest Rate

Broadened

Drive D

Social imension

%

%

2010

%

%

%

%

%

yr

3 4 5

% %

%

1 2 3 4 5 6

Minimum Amount Limit Amount

10,000 Baht

1

%

1 2 2542 2543 25442542 25452543 25472544 25482545 25492547 25502548 25512549 2550 2551

Minimum Amount

Distribution

Step-up Interest Rate yr

yr 1 2 3

Synergy

DYNAMIC FEATURES

• BROADENED DISTRIBUTION • SYNERGY DRIVE • SOCIAL DIMENSION • FINANCIAL SERVICE DEVELOPMENT Public Debt Management Office, Ministry of Finance, Kingdom of Thailand

Limit Only One Designated Financial Institutions

10,000 Baht

Add

12 Banks

Designated Financial Institutions

Across the Country

(2010) 2 Periods of Distribution

1st Priority

Senior Citizen Accessible Savings for All

Financial Service evelopment

1st Period : Senior Citizen

2nd Period: People

Future

Add Via The Branch of Designated Financial Institutions

D

Distribution channel

(

2011

Thailand… Towards Saving Society

25

Retail Bond @ ATM for Micro Savers Public Debt Management Office, Ministry of Finance, Kingdom of Thailand

Savings Bond

Retail Bond @ ATM for Micro Savers (1

st

launch Sept 2011)

1

Minimum Amount

10,000 Baht

1,000 Baht

To Allow Retail Investor Access to Quality Source of Savings

2

Selling Period

5 Days

All year round selling

To Promote Regular Saving Among Low Income Investor

3

Distribution Channel

The Branch of Designated Financial Institutions

ATM The Branch of Designated Financial Institutions

To Promote Scripless System

Phase 1 Distribute Via ATM

Phase 2 Distribute Via Electronic Platform

Secondary Bond +Mart + tradingMarket Platform LiquidityMarket + Bond+ Mart Secondary 32

Bond Market Development Bureau, Public Debt Management Office Ministry of Finance, Kingdom of Thailand

For Further Information : Chularat Suteethorn

+662 265 8050 ext. 5100

chularat@mof.go.th

Director-General, Public Debt Management Office

Pimpen Ladpli

+66 2271 7999 ext. 5802

pimpen@pdmo.go.th

Director of Government Bond Market Development Division Acting Director Bond Market Development Bureau

Nattakarn Boonsri

+66 2271 7999 ext. 5803

nattakarn@pdmo.go.th

Director of Fund Management and Bond Market Infrastructure Development Division

Chatmanee Sinsiri

+66 2271 7999 ext. 5804

chatmanee@pdmo.go.th

Director of International Bond Market Policy Division

Wilawan Prachasin

+66 2271 7999 ext. 5816

wilawan@pdmo.go.th

+66 2271 7999 ext. 5812

pothirat@pdmo.go.th

+66 2271 7999 ext. 5806

ittipong@pdmo.go.th

Economist

Pothirat Kijsriopak Economist

Ittipong Kanluan Economist

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