Thai energy firm will issue Asia’s first digital bonds

PTT Exploration and Production (PTTEP) is preparing to issue $150 million in digital bonds, the first digital debentures ever issued in Asia, as Thailand continues its pioneering role in the region with its embrace of fintech.

“PTTEP has returned to issue bonds to the public for the first time in 10 years. We are pleased to offer an investment opportunity to investors who expect steady returns,” said Montri Rawanchaikul, Chief Executive of PTTEP.

PTTEP is part of PTT Group, the partially privatized state energy conglomerate. The five-year bonds, maturing in 2026, will be available through a digital mobile payment app named Pao Tang wallet, developed by Krungthai Bank.

Krungthai Bank President and CEO Payong Srivanich said that the bank was committed to using financial innovations to develop products and services that better meet the needs of customers.

The development is another marker in the transformation of Thailand’s banking sector. Once regarded as closed and protectionist, the Thai banking sector has opened up to foreign investment, more modern management practices, and has been adopting new financial technologies to a degree many analysts had not expected.

Nearly every major Thai commercial bank has invested in fintech startups, both locally and globally, at times in joint ventures with international venture capital funds. Thai banks have worked with companies such as IBM to issue blockchain-based letters of credit, the first banks to do so.

It is reported that the bonds bear a step-up interest rate with a minimum of 2.00 percent per year and a maximum of 2.75 percent, averaging 2.25 percent per year. The Thai Ratings Information Service (TRIS) have given them an AAA rating. The bonds should be available for purchase between November 2 to 4.

Photo courtesy of: https://krungthai.com/en/krungthai-update/news-detail/897