EU woos Thai investors for its AAA-rated bonds
The European Union (EU) is inviting investors, especially government agencies, to invest in Next Generation EU (NGEU) programme to help the recovery of EU economies in the post-Covid-19 era.
EU Commissioner for Budget and Administration Johannes Hahn explained that this programme aims to raise 800 billion euros by offering bonds to investors until 2026.
He added that the EU had managed to raise 130 billion euros under the programme so far, but Asian investors who invested in the programme accounted for only 7 per cent.
"That's why I came here [Thailand] to discuss, explain and invite investors to invest in the programme," he said.
Hahn said he went to many countries to promote the NGEU programme before entering Thailand, such as the United Kingdom, Japan, South Korea, Malaysia and Singapore, adding that he planned to go to the US and Canada in October.
He said the programme received a good response during the meeting with Bank of Thailand (BOT) Governor Sethaput Suthiwartnarueput.
He said the BOT governor understands that these AAA-rated bonds in euro will help increase investment alternatives apart from bonds in dollar.
Hahn said EU will launch green bonds worth 250 billion euros with a system that enables investors to know how the cash is being spent under the programme.
He added that the interest on a 10-year green bond is now 1.6 to 1.7 per cent.
He also confirmed that everyone can subscribe to the aforementioned green bonds, but the EU will focus on attracting sovereign wealth funds and pension funds first.
"This is why our bonds were rated AAA," he said.
Hahn said Europe is facing supply chain disruption due to the Russia-Ukraine war similar to other countries. He expected Europe's economy to grow by 2.5 per cent this year and 1.5 per cent next year.
He didn't expect fuel prices in Europe to return to normal within a year, adding that the supply chain disruption would resolve once China lifts the lockdown measure.
