VIENTIANE: Laos has marked a major milestone in its efforts to expand access to international capital markets, listing a record US$500 million government bond on the Hong Kong Stock Exchange and securing its first inclusion in the Emerging Markets Bond Index (EMBI).
The landmark bond issuance, the largest international offering by the Lao government to date, is expected to broaden the country’s investor base, diversify financing sources and strengthen international investor confidence.
Deputy Prime Minister and Minister of Finance, Santiphab Phomvihane, led a Lao delegation to a gong ceremony on October 29 to mark the official listing of the bond on the Hong Kong Stock Exchange, according to the Ministry of Finance.
The bond has a maturity period of 5.5 years and attracted strong demand from international investors, with subscriptions exceeding the amount offered by 2.9 times.
A total of 86 investors from Asia, Europe, the Middle East, Africa and the United States placed orders, reflecting remarkable international interest in Lao government securities, the ministry said.
The successful issuance also marks the first time a Lao government bond has been included in the Emerging Markets Bond Index, an important benchmark used by international institutional investors to assess emerging-market debt securities.
The inclusion is expected to increase the visibility of Lao government bonds among global investors and potentially attract a broader range of institutional investment.
The Hong Kong listing represents an important step in the government’s efforts to diversify its financing options while improving debt management and maintaining long-term fiscal sustainability.
It also establishes a pricing benchmark for future international bond issuances, potentially paving the way for other Lao entities, particularly state-owned enterprises, to access international capital markets.
The Ministry of Finance said the development would help strengthen investor confidence, supported by the government’s commitment to transparency in economic management and the timely fulfilment of its financial obligations.
In another positive development, international credit rating agency S&P Global Ratings has upgraded Laos’ sovereign credit rating from CCC+ to B-, following a review of the country’s economic and financial conditions.
The review was conducted in cooperation with the Ministry of Finance’s technical team and other relevant parties.
The rating upgrade represents an improvement in the country’s assessed creditworthiness and signals recognition of progress in macroeconomic and financial management.
The combination of the record bond issuance, entry into the EMBI and improved sovereign credit rating marks an important development in Laos’ engagement with international financial markets.
These achievements could provide additional opportunities for the government to attract international financing, although maintaining investor confidence will depend on continued economic stability, prudent debt management and the fulfilment of financial commitments. – Vientiane Times/ANN
