Currently, several bond issuers are facing issues such as defaults or the need to extend maturity dates. Although the number of such issuers is relatively small compared to the total number of the debt securities issuers and the total fundraising size in the bond market, defaults or requests for maturity extensions are significant factors that impact investor confidence in bond investment. 

In light of this circumstance, the Capital Market Supervisory Board has passed a resolution approving the proposed amendments to the debt securities offering and disclosure rules. The key points of the draft amendments are as follows:  

     Debt Securities offering rules:  

     1)  To allow the bond issuer who has outstanding bonds that are undergoing maturity extension or debt repayment postponement, or are in default, to issue and offer for sale only subordinate bonds, and to require that the names of the bonds be clearly specified to indicate that the issuer is undergoing maturity extension or debt repayment postponement, or is in default, as the case may be; 

     2)  To require the preparation of financial statements in accordance with the Thai Financial Reporting Standard for Publicly Accountable Entities (PAE) in case of debt securities offering to Ultra High Net Worth Investors or High Net Worth Investors; and

     3)  To mandate a clear description of “risky bond” in the names of debt instruments with risky features.    

     Disclosure rules:  

     1)  To revise the disclosure of the fundraising purposes and the reporting of the proceeds usage by including more comprehensive types of fund utilization purposes and mandating the fund usage reporting every six months;     

     2)  To require the bond issuer to report its contravention of financial covenants to the SEC, as specified in the terms and conditions;  

     3)  To revise the rules on disclosure of the financial ratios, significant financial highlight and financial covenants in the registration statement for debt securities offering and factsheet;  

     4)  To revise the disclosure on risky debt securities by mandating a warning statement of investment risk of such products; and  

     5)  To enhance disclosure of significant information that may have impacts on investors’ decision making such as additional details of collaterals, etc. 

The consultation paper is available at https://www.sec.or.th/TH/Pages/PB_Detail.aspx?SECID=979. Stakeholders and interested parties are welcome to submit comments and suggestions through the website or email: debt@sec.or.th. The public hearing ends on 11 April 2024. 

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Remark:  

* Non-complex debt securities in non-investment grade category or without credit rating.