Key Highlights:

• December 2024 bond issuance value decreased by 65.7% MoM to 39.5 billion baht.
• The overall corporate bond market in the past year and outlook for 2025.
• 3 companies had their corporate credit ratings downgraded in December 2024: EP, MIDA, and SST.
• Bond offerings in January 2025.

Figure 1 : New registered bonds (THB Billion)

( Source : FynnCorp IAS’s compilation from SEC and ThaiBMA )

• In the past month, we have observed a significant 65.7% month-over-month (MoM) decline in corporate bond issuance, with the total value dropping to 39.5 billion baht. This downturn can be attributed to seasonal factors at the end of the year, as demand waned due to increased investments in other financial products for tax purposes. The issuance was primarily composed of investment-grade bonds, accounting for 84.8% of the total at 33.5 billion baht, while Non-investment-grade bonds represented 15.2% or 5.9 billion baht.

Figure 2 : Maturity Vs. New Registered Bonds (THB Billion)

( Source : FynnCorp IAS’s compilation from SEC and ThaiBMA )

Overview of the Thai Bond Market in 2023 and Outlook for 2024

• The Thai bond market in 2023 was characterized by relatively high interest rates until the Bank of Thailand (BOT) decided in October 2023 to cut its policy rate by 25 basis points from 2.50% to 2.25%. The BOT viewed this as a neutral adjustment, aligned with the economy’s potential. Subsequently, in December, the BOT maintained the rate, citing a projected GDP growth of 2.7% and 2.9% for 2023 and 2024, respectively, amid expectations of lower headline and core inflation. This rate cut followed similar moves by major central banks like the European Central Bank (ECB), Swiss National Bank (SNB), and Bank of Canada (BoC), while the Federal Reserve (Fed) maintained higher rates for an extended period.
• Throughout 2023, the Thai Bond Market Association (ThaiBMA) reported a net outflow of foreign funds of approximately 67 billion baht. This was due to net selling in the first half of the year as the Fed maintained high rates and continued outflows in October and November following the BOT’s rate cut. However, in December, there was a net inflow of 5,870 million baht driven by foreign investors’ expectations of further rate cuts and currency fluctuations, reflected in the purchase of long-term bonds worth 20,232 million baht.
• Nevertheless, as of the end of 2023, the Thai government bond yield curve declined in the shorter end but increased in the 3-year and longer tenors. This reflects the relatively low foreign ownership of Thai bonds (5.4% of the total outstanding) and the divergent views of domestic investors. Consequently, longer-term yields increased to compensate for perceived risks, especially among domestic investors. Therefore, interest rates on long-term corporate bonds, particularly Non-Investment Grade bonds, are expected to remain elevated in 2024, reflecting investor concerns over past defaults and extensions, as well as economic uncertainties.
• These factors contributed to a decline in overall corporate bond issuance in 2023, especially for High Yield (Non-Investment Grade and non-rated) bonds, which experienced a 38.7% year-on-year decrease. In contrast, Investment Grade bonds witnessed a slight decline of 2.7% year-on-year, indicating continued investor interest in this segment.
• By sector, the Finance sector was the largest issuer of corporate bonds in 2023, followed by Property and Energy & Utilities. These three sectors also had the highest outstanding balance and the largest maturity amounts in 2024. Consequently, significant bond rollovers are expected in these sectors in 2024.

Figure 3 : Outstanding Value of Long-term Bond with Maturity by sector

( Source : FynnCorp IAS’s compilation from SEC and ThaiBMA )

Bonds Offered in December 2024

• 7 companies were rated as Investment Grade based on their bond issuance: SCGP, LHFG, QH, CENTEL, PTTGC, NER, and FTREIT.
• 10 companies were categorized as Non-Investment Grade: TURBO, J, SGC, TRITN, SKY, NUSA, ETC, ASW, CPLAND, and BANPU.
• 9 companies were also classified as Non-Investment Grade: MJD, CWTTH, PD, MICRO, SGF, TAA, CMC, TNL, and PF.
• Figure 3, despite a significant increase in the total value of long-term corporate debt securities registered in December, nearly half of the issuing companies, specifically 5 out of 17, were unable to raise the full amount of funds they had targeted through their bond offerings.

Credit change (Issuer Rating)

Figure 4 : Company rating changes during 2019-2024

( Source : FynnCorp IAS’s compilation from SEC and ThaiBMA )

• In December 2024, 3 companies—EP, MIDA, and SST—had their corporate credit ratings downgraded. This brought the total number of companies experiencing credit rating downgrades in 2024 to a record high of 41.

Credit Rating Downgrade

• TRIS Rating has downgraded the corporate credit rating of Eastern Power Group Public Company Limited (EP) to ‘B’ from ‘BB-‘, reflecting a continuous decline in its liquidity and an elevated risk of default. The rating outlook remains ‘Negative’, indicating uncertainty about the company’s ability to generate sufficient liquidity to meet its upcoming debt obligations, including coupon payments. The company’s debt is heavily concentrated in bonds, with approximately 3 billion baht maturing within the next 12 months.
• TRIS Rating has also downgraded the corporate credit rating of Mida Asset Public Company Limited (MIDA) to ‘BB-‘ from ‘BB’, citing weak group liquidity, increased risk of imminent default, and limited funding options. The rating outlook is ‘Negative’, reflecting uncertainty stemming from the proposed extension of bond maturity by Mida Leasing Public Company Limited (ML), a subsidiary of MIDA. Additionally, TRIS Rating has downgraded ML’s credit rating to ‘BB-‘ from ‘BB’ and its standalone credit profile (SACP) to ‘bb-‘ from ‘bb+’.
• TRIS Rating has downgraded the credit rating of Thripsathorn Public Company Limited (SST) from ‘BBB-‘ to ‘BB+’ with a ‘Stable’ outlook. The downgrade reflects weaker-than-expected performance in the restaurant business and increased debt levels. The debt-to-EBITDA ratio is expected to remain above the threshold of 5 times. The rating also considers the company’s position in the highly competitive restaurant and quick-service restaurant (QSR) industry, as well as the stable cash flow from its warehousing business. The credit rating of MUD, a major subsidiary of Thripsathorn, is aligned with its parent company.

New Registered Bond in January 2025

• The corporate bonds to be offered in January 2025 include TTA SC BTG BSRC DHOUSE SIRI BTSG NOBLE MQDC INET GRAND CPF S

Figure 5 : New Registered Bond in January 2025