The Thailand government has announced that it has recently approved a plan by the state-owned Electricity Generating Authority of Thailand (EGAT) to make an offering of an estimated $300 million of bonds overseas with the World Bank as a guarantor, Dow Jones reports.
Under the conditions attached to the World Bank guarantee, EGAT must be privatized and the tariffs in Thailand must be raised.
In addition, EGAT will be expected to keep is self-financing ratio above 25 per cent and its debt-service ration above 1.3. EGAT has been able to maintain these ratios for previous loans but has failed to maintain them since last year’s economic crisis.
Thailand is likely to pay a coupon rate only 200 basic points above comparable US treasury bills. Without the guarantee, the country would have to pay 400 basic points above treasury bills.