1.1 Treasury Bills
Treasury bills are treasury securities having a maturity period of one year or less and sold in the primary market by auction at a discount from face value. Upon maturity the face value will be paid to the holder.
Treasury bills were first issued in Thailand in 1945, worth 50 million baht with a maturity period of 4 months. The issuance of treasury bills continued until 1990 and no treasury bill was issued since then. However, since 27th September 1999, the government has resumed issuing treasury bills until now.
At present, treasury bills typically have 28-day, 91-day, and 182-day maturity periods.
1.2 Debt Restructuring Bills
Debt restructuring bills are treasury securities having a maturity period of one year or less and sold in the primary market by auction at a discount from face value. Upon maturity the face value will be paid to the holder.
The issuance of debt restructuring bills is authorized under section 7 of the Emergency Decree Authorizing the Ministry of Finance to Raise and Administer Loans for the Financial Institutions Development Fund B.E. 2541. Debt restructuring bills were first auctioned in March 2001 and continued until 2007.
Debt restructuring bills have maturity period based on number of days, typically having a 182-day maturity period.
1.3 Government Bonds
Government bonds are debt securities issued by the government, having a maturity period of one year or longer. The primarily objectives are to finance the budget deficit in each fiscal year or when the expenditures exceed the revenue, to support social and economic development and to restructure public debt.
The first government bonds, worth 1 million pound sterling, were issued by the Royal Siamese Government in 1905 called “European Bonds 1905”, to raise fund from investors in London and Paris capital markets. The proceeds were used to finance railroad construction projects, strengthen treasury reserve, and finance other social services. These bonds were in bearer form having a 40-year maturity with a 4.5% coupon per annum.
The first domestic government bonds, called “Loan Bond B.E.2476”, were issued in 1933 during Phraya Manopakorn Nititada government. These bonds were issued according to the Domestic Loan Management Act B.E. 2476 of Baht 10 million, in which the sale was managed by the Ministry of Finance. The bonds were in bearer form having 10-year maturity with a 4.5% coupon per annum.
At present, government bonds are issued with different names, e.g. government bonds, special-issue government bonds, debt restructuring government bonds and debt management government bonds.
Interest payments of government bonds are made at regular intervals throughout the life of the bonds, normally twice a year. Upon maturity, the principal of face value will be paid along with the last interest payment.
1.4 Government Savings Bonds
Government savings bonds are debt securities sold, as an investment or savings alternative, to individuals and non-profit institutions such as foundations, the Thai Red Cross Society, and the National Council on Social Welfare of Thailand.
Interest payments of government savings bonds are made at regular intervals throughout the life of the bonds, normally twice a year. Upon maturity, the principal of face value will be paid along with the last interest payment.