The state-owned Small and Medium Enterprise Development Bank (SME D Bank) expects its second batch of bonds worth 5 billion baht to get a warm welcome from institutional investors after a successful launch of the first lot.
The second tranche of the bank's bonds with a maturity of five years and eight months will be sold to investors on June 17 through an e-bidding auction conducted by the Bank of Thailand, said SME D Bank chairman Pasu Loharjun.
These institutional investors will include commercial banks, the Government Pension Fund, provident funds, mutual funds, Government Savings Bank, the Bank for Agriculture and Agricultural Cooperatives, GH Bank, securities companies, and life and non-life insurance firms.
The bonds will also be offered to foundations, cooperatives and juristic entities for charitable, artistic, scientific and other purposes.
SME D Bank got a bidding yield of 2.01% for its first lot of bonds worth 3 billion baht, below the bond's coupon rate of 2.125%. The bonds were four-times oversubscribed at 12 billion baht.
The strong demand for the first lot reflected investor confidence, Mr Pasu said, noting that the bonds are guaranteed by the Finance Ministry and rated AAA by Fitch.
Proceeds arising from the two batches of bonds will be used to strengthen SME D Bank's financial position and provide the bank with appropriate financial costs in the long run for low-rate lending to SMEs.
The bank extended more than 15 billion baht in loans to SMEs in the first five months of 2019, doubling the amount during the same period last year, Mr Pasu said.
SME D Bank expects lending to reach 20 billion baht by the end of June and achieve the full-year target of 60 billion baht.
