PTT – Krungsri Jointly Stimulate Thailand’s Financial Market, Through Thailand’s Largest THOR-based Loan Agreement

The Bank of Thailand (BOT) congratulated to PTT Public Company Limited (PTT) in collaboration with Krungsri (Bank of Ayudhya PCL) on a successful THB 6-billion long-term loan facility using Thai Overnight Repurchase Rate (THOR) as reference rate for a period of 5 years. The transaction marks the largest ever THOR-based loan facility since the launch of the new THOR reference rate in Thailand. PTT and Krungsri are regarded as the major driver to boost confidence in Thailand’s financial market.

Ms. Pannalin Mahawongtikul, Chief Financial Officer, PTT Public Company Limited, revealed, “PTT is very grateful to be a part in promoting stability and development of the financial market with Krungsri as a long-term partnership to align Bank of Thailand’s policies. For this time, PTT has agreed to take Krungsri’s offer a THB 6-billion long-term loan facility using Thai Overnight Repurchase Rate (THOR) as reference rate for a period of 5 years. This agreement is an aim to encourage the use of THOR regarding PTT’s success in being first private company to spearhead the issuance of THOR reference debentures last August. This loan facility is marked as a return of PTT to raise funds from commercial banks through THB long-term loan in more than a decade. PTT plans to use this loan to accommodate the growth of business in accordance with the new vision of “Powering Life with Future Energy and Beyond.”

Mr. Seiichiro Akita, Krungsri President and Chief Executive Officer, said, “Krungsri and PTT have well-established relationships for more than 30 years. As a partner bank, Krungsri has provided financial supports to PTT and its subsidiaries under various opportunities through the synergy of Krungsri’s expertise and MUFG’s solid global network to foster the Company’s growth and its leadership in the energy sector domestically and internationally. On the occasion that PTT expands the role to drive the financial market with the largest-ever loan facility in Thailand based on THOR, Krungsri is extremely privileged to have the opportunity to work together with PTT again as well as supporting BOT’s vital policy of developing the new reference rate in the financial market.”

Mr. Prakob Phiencharoen, Krungsri Head of Corporate and Investment Banking Group, added, “Since 2020 that BOT first introduced and have actively promoted THOR as the new Thai reference interest rate, replacing THBFIX, Krungsri and MUFG realize the importance of this initiative as this is the key to Thailand’s development in financial market and global markets, similar to other countries which have to transition their benchmark away from LIBOR-related indexes. We hope this long-term loan based on THOR reference rate that Krungsri has provided to PTT, which is one of the country’s leading conglomerates, would help promote greater awareness and confidence among market players including corporate customers, financial intermediaries, and institutional investors in order to further build more THOR underlying financing and hedging transactions. This would then help increase the market liquidity and enable market players to hedge against interest rate risks better.”

Mrs. Alisara Mahasandana, Assistant Governor, Financial Markets Operations Group, Bank of Thailand (BOT), said, “This THOR-based loan deal reflects the confidence of commercial banks and leading corporations in Thailand, such as PTT, in the application of THOR and is regarded as a prototype deal that will help promote confidence among market participants in using THOR, which is a reference rate for overnight lending, to calculate the interest rates on each loan repayment due date by the ‘Compounding in Arrears’ method which is consistent with international standards and commercial practices in the financial markets. BOT would like to express its gratitude and appreciation to Krungsri and PTT for acting as key drivers in promoting the popularity of THOR-based loan transactions as well as building confidence among market participants in the application of THOR according to international standards. This will certainly contribute to the smooth and timely transition of Thai reference rate from THBFIX to THOR.”

Source: Bank of Ayudhya PCL

Symbol: BAY, PTT