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Foreign Firms Selling Baht-Denominated Bonds to face stricter rules
Key points of the proposed changes include requiring the foreign issuer to obtain an investment-grade rating from an international credit rating agency, appoint a bondholder representative, and register the bonds with the Thai Bond Market Association
The Securities and Exchange Commission (SEC) in Thailand is seeking public comments on proposed amendments and regulations for the sale of newly issued bonds denominated in Thai baht by foreign entities.
Key Takeaways
- The Securities and Exchange Commission (SEC) in Thailand is seeking public comments on proposed amendments and draft regulations to streamline the application process for the offer for sale of newly issued bonds of foreign entities denominated in Thai baht.
- The proposed amendments include requiring foreign issuers to file an application directly with the SEC, obtain an investment-grade rating from an international credit rating agency, appoint a bondholder representative, and register the bonds with the Thai Bond Market Association.
- The SEC aims to align the criteria for issuance and offer for sale of foreign currency-denominated bonds by foreign businesses in Thailand with the proposed amendments for baht bonds.
The proposed changes aim to streamline the application process and adjust the criteria to better reflect the level of risk associated with foreign issuers. Currently, foreign issuers must comply with approval and disclosure rules, as well as obtain approval from the Ministry of Finance. Under the proposed amendments, foreign issuers would instead file an application directly with the SEC.
Key points of the proposed changes include requiring the foreign issuer to obtain an investment-grade rating from an international credit rating agency, appoint a bondholder representative, and register the bonds with the Thai Bond Market Association.
The SEC would temporarily exempt outstanding non-investment grade bonds from these requirements. The proposed amendments also seek to align the criteria for foreign currency-denominated bonds with those for baht bonds. Stakeholders and interested parties can submit comments and suggestions until December 20, 2023.
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