National Housing Authority to Ease Financial Burden in Thailand.

Byline: Krissana Parnsoonthorn

Aug. 6--The National Housing Authority (NHA) plans to reduce its hefty financial burden by converting some 4.07 billion baht in outstanding debt instruments into equity by the end of the year.

The proposal is subject to approval by the National Economic and Social Development Board and the cabinet.

"We expect to see our paid-up capital raise to five billion baht from one billion baht at the present and this will make us more flexible to invest in new projects in the near future," one senior NHA director said.

After the debt conversion, the state-run agency is expected to have its outstanding debts reduced to 20 billion baht, of which most are long-term bonds with durations of five, seven and eight years. Its debt-to-equity ratio would be lowered to 3.04:1 from 7.5:1 currently.

This month the NHA is scheduled to repay its bonds worth 500 million baht. Next year, it has bonds totalling three billion baht coming due. The NHA will refinance half of its bonds due for repayment next year and the remainder would be securitised.

"We need to refinance some of our debts because our interest cost is as high as 11.5 percent while the market sees interest rates fall every day," the director said.