Thailand Issues Inaugural $865 Million Sustainability-Linked Bond

The government of Thailand announced the completion of its first Sustainability-Linked Bond (SLB), raising 30 billion baht (USD$865 million), with interest rates on the new 15-year notes tied to the country’s climate and energy transition goals.

Demand for the bonds were strong, with the PMDO upsizing the offering from 20 billion baht to 30 billion baht, after the offering was oversubscribed by 2.8 times.

According to Thailand’s Public Debt Management Office (PMDO), the offering is the first government sustainability-linked bond in Asia, and the third globally. The offering marks a significant milestone for SLBs, which have faced challenges over the past several quarters, as issuers faced scrutiny over issues such as the credibility and robustness of the bonds’ linked sustainability targets, after the market saw rapid growth earlier in the decade. According to Moody’s, global SLB issuance in Q2 2024 declined to only $8 billion, after peaking at annual issuance of $90 billion in 2021.

Thailand’s new SLB has its terms linked to two sustainability performance targets, including its goals to reduce total greenhouse gas emissions by 30% by 2030 from “business-as-usual” values, and to increase new registrations of zero-emission passenger vehicles, including cars and pickup trucks, to 440,000 per year in 2030.

Prior to its initial offering, the PMDO announced plans to issue a 130 billion baht (USD$3.9 billion) SLB in 2025.