PTT and Krungsri in Largest THOR-Based Loan Agreement

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The Bank of Thailand (BOT) congratulated PTT Public Company Limited (PTT) in collaboration with Krungsri (Bank of Ayudhya PCL) on the success of a THB 6 billion long term loan facility using the repurchase rate at Thai day-to-day (THOR) as the benchmark rate for a period of five years. The transaction marks the largest THOR-based loan facility since the launch of the new THOR benchmark rate in Thailand. PTT and Krungsri are considered to be the main drivers of confidence in the Thai financial market.

Ms. Pannalin Mahawongtikul, Chief Financial Officer, PTT Public Company Limited, revealed, “PTT is very grateful to be part of promoting stability and financial market development with Krungsri as a long-term partnership to align Bank of Thailand policies. This time, PTT agreed to accept Krungsri’s offer of a THB 6 billion long-term loan facility using the Thai Overnight Redemption Rate (THOR) as the benchmark rate for a period of five years. This agreement aims to encourage the use of THOR in light of PTT’s success as the first private company to spearhead the THOR benchmark debenture issuance last August. This loan facility marks a return of PTT to fundraising from commercial banks through a long-term Thai baht loan for the first time in over a decade. PTT plans to use the loan to develop its business in line with its vision of “Powering Life with Future Energy and Beyond”.

Mr. Seiichiro Akita, President and CEO of Krungsri, said, “Krungsri and PTT have enjoyed a well-established relationship for over 30 years. As a partner bank, Krungsri has provided financial support to PTT and its subsidiaries in various opportunities through the synergy of Krungsri’s expertise and MUFG’s strong global network to foster the Company’s growth and leadership in the energy sector at national and international levels. As PTT expands its role to lead the financial market with the largest THOR-based lending facility ever created in Thailand, Krungsri is extremely privileged to have the opportunity to work with PTT again and support vital policy. of the Bank of Thailand to develop the new benchmark rate in the financial markets.

Mr. Prakob Phiencharoen, Krungsri Head of Corporate and Investment Banking Group, added, “Since 2020, when BOT first introduced and promoted THOR as the new Thai benchmark interest rate, replacing THBFIX, Krungsri and MUFG have realized the importance of this initiative as a key to market development. Thai financial and financial markets globally, like other countries that have abandoned their benchmarks of LIBOR-linked indices. We hope that this long-term loan based on the THOR benchmark rate that Krungsri has granted to PTT, one of Thailand’s leading conglomerates, will help raise awareness and confidence among market players, including corporate clients, financial intermediaries and institutional investors in order to build more underlying financing and hedging transactions THOR. This would then increase market liquidity and allow market participants to better hedge against interest rate risks. “

Ms. Alisara Mahasandana, Deputy Governor, Financial Market Operations Group, Bank of Thailand (BOT), said, “This THOR-based loan agreement reflects the confidence of commercial banks and major corporations in Thai businesses such as PTT. This application of THOR is considered as a prototype agreement which will strengthen the confidence of market players in the use of THOR. THOR is simply a benchmark rate for overnight loans to calculate the interest on each loan repayment term using the “Compounding in Arrears” method which conforms to international standards and financial market practice. 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 the confidence of market players in the application of THOR in accordance with to international standards. This will certainly contribute to the smooth and timely transition of the Thai benchmark rates from THBFIX to THOR. “


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