PTTEP is launching Asia’s first fully digitalised corporate bond, providing Thai investors with simple and real-time trading on the Pao Tang electronic wallet application.
With a minimum outlay of 1000 baht (US$29.9) investors will be able to buy corporate bonds in the Thai national exploration and production company and earn interest paid every six months.
The PTTEP Digital Bonds have an AAA credit rating by TRIS Rating. PTTEP's freshly installed chief executive Montri Rawanchaikul said the company would issue bonds to the general public in co-operation with Krungthai Bank.
The minimum subscription is set to “the unprecedentedly low value” of only 1000 baht to allow retail investors to invest.
PTTEP is scheduled to determine the size of the issue by the end of this month and the launch is set to be between 2 and 4 November.
PTTEP Digital Bond has a five-year tenor and bears a step-up interest rate with a minimum of 2% per annum and a maximum of 2.75% per annum, averaging to 2.25% annually.
Investors can subscribe with subsequent multiples of 1000 baht and the maximum subscription is 10 million baht.
“PTTEP has returned to issue bonds to the general public for the first time in 10 years. As a Thai national energy company, we’re pleased to offer an investment opportunity to Thai investors who expect steady returns from growth companies," Montri said.
"This issuance of digital bonds comes with the lowest-ever minimum subscription among Thai bonds. Investors can easily subscribe via Pao Tang mobile application, which is part of the effort to use technology to develop and enhance the efficiency of the Thai capital market.
The proceeds from the bond issuance will be used for refinancing outstanding loans or bonds, as well as working capital for future growth of business.”
Payong Srivanich, president of Krungthai Bank, said the bank is committed to using financial innovation to develop products and services that attracts diverse customers and offers easily accessible digital channels.
The bank has collaborated with PTTEP to offer the digital bond through the app.
This marks the first time in Asia that a corporate bond is offered in the primary market and traded into cash in the secondary market via a digital wallet in an all-online channel.
The platform is commission-free and transactions are immediate — buyers receive the bonds and sellers receive the money instantly — thus aiming to boost the overall liquidity of the debt market, as well as the flow of investment capital.
Payong said: “This collaboration has revolutionised the investment scene and has democratised bond investment, allowing all Thais, regardless of their level of income, to invest in the high-quality, AAA rated corporate bond with the minimum investment amount as small as 1000 baht.
"Moreover, they can trade the bond into cash at will anytime and anywhere via the Thailand Open Digital Platform Pao Tang mobile application,” he added.