Page 66 - Annual Report 2552

PDMO PUBLIC DEBT

MANAGEMENT
OFFICE

6. The Establishment of Credit Guarantee and Investment Mechanism: CGIM
rd
In the ASEAN+3 Finance Ministers’ Meeting on 3 May 2009 in Bali, Indonesia, the member
countries agreed to establish the Credit Guarantee and Investment Mechanism (CGIM) in order to support

the local currency bond issues of the private sectors in ASEAN+3 member countries (ASEAN countries,
the People’s Republic China, the Republic of Korea, and Japan). The CGIM will be an Asian Development

Bank (ADB) trust fund with an initial capital of US$500 that can be increased later if the market demand
rises. The working group of the Asian Bond Market Initiative (ABMI) Task Force 1 which is responsible for

developing and promoting local currency bond issue in the region and co-chaired by Thailand and China
was assigned to discuss the details of CGIM establishment.

Since the PDMO is directly in charge of bond market development in Thailand, we have
discussed the establishment of CGIM with the ASEAN+3 member countries and the ADB and obtained

the primary conclusion of the functions of CGIM: (1) Guarantee local currency bonds issued by the
legal entities in the ASEAN+3 member countries with the investment grade credit rating and sold in the

ASEAN+3 member countries’ bond markets. (2) Guarantee other currency bonds issued by the
legal entities in the ASEAN+3 member countries with the investment grade credit rating and sold in

the ASEAN+3 member countries’ bond markets only when they are currency risk hedged. (3) Invest in
businesses that bolster bond market development in the region when agreed by the participants of CGIM.

(4) Support the transactions in (1)-(3).
The establishment of CGIM is a part of infrastructure development for bond market in the

country and the region. It lowers the cost of local currency bond issue of the ASEAN+3 member
countries with investment grade credit rating. It also extends bond maturity which improves the

efficiency of fund raising and matches with capital demands of bond issuers.

รายงานประจำาปี 2552 ANNUAL REPORT 2009 65