Thailand raises savings bond issue to 50 bln baht

BANGKOK, June 23 - Thailand will increase the size of its planned savings bond issue by 67 percent to 50 billion baht ($1.46 billion) in July, the government said on Tuesday, aiming to attract savers at a time of low deposit rates.

The government will offer 30 billion baht to Thai citizens aged over 55 years and the rest to general investors, deputy government spokesman Supachai Jaisamut told reporters after a weekly cabinet meeting.

The five-year, 30 billion baht tranche, planned for the third week of July, will have a coupon of 3.8 percent in early years and 5 percent in the fifth year, he said, adding the Finance Ministry had to submit the details to cabinet again next week.

Five-year government bonds yielded about 3.1 percent on Tuesday while one-year deposit rates are only one percent.

Supachai said details of the remaining 20 billion baht in bonds to be sold to the public were not yet set.

The retail bonds are part of a government plan to borrow 800 billion baht to fund stimulus spending and fiscal deficits. ($1=34.14 Baht)