Thailand PDMO likely to auction 20-year bonds worth THB8 billion

Thailand’s Public Debt Management Office (PDMO) is expected to auction long-term 20-year bonds worth THB8 billion on Wednesday. January 25. After a strong 5-year bond issue last week, ANZ expects a more cautious tone in this 20-year bond issue.

The U.S. Treasury yields have rebounded from their lows and the tenor of this issue is significantly longer. The small issuance size will likely see the auction taken up by onshore, buy-to-hold institutional investors despite limited foreign interest. After touching to a peak level in late December, ThaiGB yields have retraced lower as the global cues turn more conducive amid a rebound in U.S. Treasuries and a weak dollar index, reported ANZ in its research note.

For this long-term auction, the much longer tenor will see demand predominantly coming from onshore, long- term institutional investors. The small issuance size of THB 8billion (vs typical size of THB10-12 billion for this bond) is a key positive. Also, along with the curve, the 20-year bond is now offering better value compared to recent months. However, with the external environment turning challenging again, we expect limited offshore interest in this auction, they added.