The Thai Bond Market Association (ThaiBMA) has reported a rising trend of bond defaults and payment delays in 2025, mainly among small-cap issuers struggling with liquidity amid Thailand’s economic slowdown.
In the first half of 2025, bond defaults reached 2.34 billion baht, involving four issuers: Cho Thavee (CHO) with 745 million baht, Clover Power (CV) with 452 million baht, WRX (non-listed) with 408 million baht, and Grand Asset Hotels and Property (GRAND) with 300 million baht. Additionally, deferred bond payments amounted to 17.5 billion baht across 14 issuers, including Property Perfect (PF), Energy Absolute (EA), PRIME, Richy Place (RICHY), NR Instant Produce (NRF), Eastern Power Group (EP), and others.
In 2023, defaults totaled 16.3 billion baht from five issuers, with 12.4 billion baht delayed in payments by 14 issuers. Last year saw five defaults of 3.17 billion baht and 37.9 billion baht in delayed payments from 17 issuers.
Ariya Tiranaprakij, EVP of ThaiBMA, attributed the rise in defaults and delays to ongoing economic pressures, which have impacted corporate earnings and cash flows. While large companies may slow bond issuance in the second half of 2025 due to cheaper bank loans amid falling interest rates, smaller firms with weaker finances might continue issuing bonds despite increased risks.
Investor sentiment remains cautious, favoring high-rated bonds and steering clear of high-yield or non-investment grade securities. ThaiBMA introduced warning labels—such as failed payment (FP), failed with guarantee (FPG), default (DP), no payment-related default (DNP), and restructuring (RS)—to alert investors about problematic bonds. The Stock Exchange of Thailand may adopt similar indicators for high-risk securities.
Somjin Sornpaisarn, president of ThaiBMA, noted that as of Q2, the total bond market value stood at 17.3 trillion baht, representing about 93% of Thailand’s GDP, a 1.1% increase from the end of 2024. This growth was mainly driven by increased government bond issuance, while corporate bond issuance slightly declined.
In the first half of 2025, long-term corporate bond issuance dropped 19.3% year-on-year to 399 billion baht across investment-grade and high-yield sectors. Foreign investors remained net buyers, with net inflows of 32.3 billion baht, increasing total foreign holdings to 900 billion baht, or 5.2% of the total bond market.
A ThaiBMA survey indicates most market participants expect the Bank of Thailand to cut its policy rate by 0.25 percentage points in Q4 2025, lowering it to 1.50%. Bond yields are also predicted to decrease, with forecasts of a 5-10 basis point decline in 5-year and 10-year Thai government bond yields, supported by monetary easing, moderate economic growth, and global interest rate trends.