A clear shift is emerging in Thailand’s bond market in 2025, driven by liquidity pressures among smaller issuers and a cautious investment climate. The Thai Bond Market Association (ThaiBMA) reports a marked rise in bond payment defaults and delays in the first half of 2025, underscoring ongoing economic strain and tighter corporate cash flow. While larger entities may access cheaper funding options as policy rates ease, smaller issuers appear more exposed to financing challenges, potentially signaling a broader re-pricing of risk in the Thai debt market. Investor sentiment remains conservative, with a pronounced preference for highly rated bonds and a discernible aversion to high-yield or non-investment grade issuers. In response to the evolving risk landscape, ThaiBMA has introduced new transparency tools, including warning labels for problematic bonds, aimed at bolstering investor awareness and market discipline. Against the backdrop of a bond market that still represents a substantial portion of Thailand’s financial system, the latest data illuminate both the fragility and resilience of market participants as they navigate an environment of slower growth, fluctuating liquidity, and shifting monetary policy expectations.
Rising defaults and delays redefine 2025 bond market dynamics
The first half of 2025 has exposed a clear pattern: defaults on bond payments are rising, and the incidence of delayed payments remains widespread, particularly among issuers with smaller scale and more precarious liquidity positions. In the six months to June 2025, bond defaults reached a total of 2.34 billion baht, distributed across four issuers. The largest default among these was Cho Thavee (CHO), with bonds totaling 745 million baht. Clover Power (CV) followed with 452 million baht, WRX (non-listed) accounted for 408 million baht, and Grand Asset Hotels and Property (GRAND) comprised 300 million baht. This concentration of defaults among a small number of issuers underscores the disproportionate vulnerability of smaller-cap players in the current macroeconomic setting, where slower demand, higher operating costs, and tighter credit conditions compress earnings and cash flow.
In addition to outright defaults, the period witnessed a broad wave of deferred bond payments totaling 17.5 billion baht, affecting 14 issuers. The scale and dispersion of these deferrals reflect a pervasive liquidity squeeze rather than isolated issues at a handful of troubled entities. Among the group of defaulters, notable amounts included Property Perfect (PF) at 2.73 billion baht, Energy Absolute (EA) at 2.4 billion, GRAND at 2.26 billion, Prime Road Power (PRIME) at 2.05 billion, Richy Place (RICHY) at 1.53 billion, NR Instant Produce (NRF) at 1.3 billion, Eastern Power Group (EP) at 1.03 billion, JCK International (JCK) at 928 million, Country Group Development (CGD) at 798 million, East Coast Furnitech (ECF) at 597 million, Sahakol Equipment (SQ) at 550 million, Thai Polycons (TPOLY) at 360 million, Jasmine Technology Solution (JTS) at 422 million, and Begistics (B) at 92 million. The breadth of this list demonstrates that liquidity stress is not confined to a single sector but rather spans a range of industries and business models, including property, energy, technology, manufacturing, and distribution.
The reported figures thus paint a two-front challenge for the 2025 market: a handful of issuers defaulting outright, alongside a wider cohort delaying payments as liquidity constraints tighten. For market participants—investors, issuers, and intermediaries alike—this signals a heightened priority on credit quality assessment, liquidity management, and the development of transparent risk signals that can assist in price discovery and risk pricing. The ThaiBMA’s data indicate that the problem is real and systemic enough to influence portfolio construction and risk management practices across sectors, even as some investors still pursue diversified exposure to Thai fixed income.
To contextualize the current season of defaults and deferrals, it is useful to recall recent annual patterns. In 2023, a total of five issuers defaulted on bond payments amounting to 16.3 billion baht, while 14 issuers delayed payments totaling 12.4 billion baht. Last year, in 2024, five issuers defaulted on bond payments with a combined value of 3.17 billion baht, while 17 issuers delayed payments totaling 37.9 billion baht. These historical benchmarks illuminate a trajectory: defaults have varied, but delays have remained a persistent feature across multiple years, often exceeding the volatility observed in outright defaults. The 2025 data thus sit within an ongoing narrative of liquidity stress in the Thai bond market, underscored by macroeconomic headwinds that affect cash flows differently across issuers, depending on sector, leverage, and access to financing channels.
This year’s early numbers also highlight the degree to which smaller-cap issuers are driving the current risk landscape. The concentration of default exposure among a handful of smaller issuers suggests that, while the bond market remains a viable financing avenue for many corporates, the cushion for missteps in investment and operating planning is notably thinner for smaller entities compared with larger, more diversified corporations. The implication for investors is nuanced: it is not merely a story of rising defaults but also of the market’s evolving pricing of credit risk across different tiers of issuers and the necessity of a more granular approach to credit analysis, stress testing, and scenario planning in portfolio construction.
H1 2025 issuer-specific highlights: four names and the scale of risk
Diving into the issuer-level picture in the first half of 2025, the defaults involved four entities and aggregated to 2.34 billion baht. Cho Thavee (CHO) emerged as the single largest default within this period, with bonds worth 745 million baht. Clover Power (CV) accounted for 452 million baht in defaulted payments, followed by WRX, which is non-listed, with 408 million baht, and Grand Asset Hotels and Property (GRAND) at 300 million baht. The concentration of default risk in this quartet points to the vulnerabilities that can arise when a portfolio contains issuers with relatively tight liquidity positions or high leverage. The fact that one of the defaults came from a non-listed entity (WRX) underscores that the bond market’s risk tapestry is not limited to the more visible, frequently traded corporate names, but also includes entities that may have more opaque liquidity profiles and less robust access to funding channels during periods of stress.
The implication for market participants is twofold. First, credit risk assessment must be precise and dynamic, capable of detecting shifts in liquidity coverage ratios, debt service coverage ratios, and refinancing risk given the evolving interest rate environment. Second, there is an implicit signal to market operators about the importance of post-default processes, including workouts, renegotiations, and potential restructuring, and how these processes affect pricing and liquidity for other, related securities in the same issuer’s ecosystem. The exposure to a relatively small number of high-risk names can have outsized effects on specific segments of the debt market, particularly if these credits are concentrated in certain sectors or if contagion effects emerge through common lenders or strategic counterparties.
Beyond the headline numbers, the broader takeaway is that even in markets with generally robust corporate financing activity, episodic stress can surface in mid-sized and smaller entities. This stress, when combined with the current macroeconomic backdrop, can create a competitive environment for risk management services, including enhanced due diligence, more granular monitoring of covenants and covenants performance, and improved disclosure aligned with investor expectations.
The 14 issuers facing payment deferrals: scale, diversity, and risk implications
In addition to outright defaults, 14 issuers faced deferred payments totaling 17.5 billion baht in the first half of 2025. The breadth of this deferral across 14 issuers demonstrates a systemic dimension to liquidity issues, rather than isolated pressures. Among these defaulters, several names appear with sizable deferral amounts that merit closer attention for investors seeking to understand the risk landscape and for policymakers evaluating indicators of financial distress within the corporate debt market.
- Property Perfect (PF): 2.73 billion baht
- Energy Absolute (EA): 2.40 billion baht
- GRAND: 2.26 billion baht
- Prime Road Power (PRIME): 2.05 billion baht
- Richy Place (RICHY): 1.53 billion baht
- NR Instant Produce (NRF): 1.30 billion baht
- Eastern Power Group (EP): 1.03 billion baht
- JCK International (JCK): 928 million baht
- Country Group Development (CGD): 798 million baht
- East Coast Furnitech (ECF): 597 million baht
- Sahakol Equipment (SQ): 550 million baht
- Thai Polycons (TPOLY): 360 million baht
- Jasmine Technology Solution (JTS): 422 million baht
- Begistics (B): 92 million baht
This list reflects a cross-section of the market, highlighting borrowers across property, energy, manufacturing, services, and technology segments. The range of deferral amounts—from the lower hundreds of millions to multiple billions—emphasizes that liquidity stress is not confined to a single sector or business model. For investors, this distribution suggests that risk monitoring should incorporate sector-specific liquidity indicators, cash-flow sensitivities to macroeconomic shifts, and the ability of issuers to navigate debt service obligations in periods of revenue volatility. For issuers, the pattern underscores the importance of transparent communication with investors and lenders, proactive covenant management, and the exploration of alternative financing solutions or restructuring options that can restore near-term liquidity while preserving long-term value.
Moreover, the deferral data illuminate potential channels for market normalization or stabilization. If macroeconomic conditions improve or if policy measures successfully ease financing conditions, the incidence of payment deferrals could recede as issuers regain access to liquidity buffers. Conversely, persistent or worsening liquidity constraints could keep deferments entrenched, compounding investor risk aversion and putting downward pressure on bond prices for affected issuers. The dual reality of defaults and deferrals thus constitutes a meaningful driver of market sentiment and pricing dynamics in the Thai bond market for the remainder of 2025 and into 2026.
In light of these developments, market participants should consider the interplay between default risk, liquidity risk, and interest rate expectations. The deferrals and defaults collectively reflect how sensitive corporate debt is to macroeconomic headwinds, and they underscore the need for prudent risk management frameworks, including diversified credit exposure, stress testing across interest-rate and liquidity shock scenarios, and the use of risk indicators that can help identify early warning signals of impending distress. As these indicators evolve, investors may adjust allocations toward higher-quality issues, longer-duration risk management strategies, or hedging approaches designed to mitigate the impact of potential defaults and payment delays on portfolio performance.
Historical comparison: defaults and delays across 2023 and 2024 in context
Understanding the current year’s defaults and payment delays requires a look back at recent performance in 2023 and 2024. In 2023, five issuers defaulted on bond payments with a cumulative value of 16.3 billion baht, while 14 issuers delayed payments totaling 12.4 billion baht. The pattern from 2023 shows a notable level of failures among a moderate number of issuers, with delays that nonetheless indicated the market’s ongoing exposure to liquidity pressures. In 2024, the picture shifted to a lower default count of five issuers but a substantial increase in payment delays, totaling 37.9 billion baht across 17 issuers. This leap in delinquencies in 2024 suggests that, even if outright defaults did not escalate, the severity and breadth of payment deferrals widened significantly, pointing to a broader liquidity problem that could compress timely debt service across a more extensive set of borrowers.
When viewed together with the 2021–2022 period (not detailed in the provided data, but commonly observed in financial cycles), these figures help delineate a typical pattern in which defaults can fluctuate due to sector-specific shocks or idiosyncratic credit events, while delays reflect structural liquidity constraints that can persist even when default rates are contained. The 2025 first-half outcomes, therefore, can be interpreted as part of a multi-year cycle characterized by episodic stress punctuated by episodes of deterioration in cash flow and refinancing risk. This interpretation has meaningful implications for investors who seek to calibrate risk premia, for issuers who must balance funding needs with prudent financial management, and for policymakers who aim to maintain stability in the bond market by ensuring transparent disclosure and robust risk signaling.
For the ThaiBMA, these comparative benchmarks reinforce the importance of ongoing market surveillance, data transparency, and the adoption of standardized risk indicators. The association’s commentary indicates that the observed defaults and delays reflect genuine economic strain rather than mere market noise. The organization’s emphasis on investor awareness and warning labels underscores a commitment to enhanced market discipline and a more granular approach to identifying and flagging high-risk securities. As this framework evolves, market participants may experience a more nuanced pricing environment in which risk categories become more clearly delineated, enabling better risk-adjusted returns for investors who implement disciplined credit selection and risk management practices.
Concurrently, the historical context reinforces the significance of macroeconomic policy in shaping bond-market outcomes. If government bond issuance continues to dominate market growth, while corporate bonds demonstrate a slight decline, the relative attractiveness of government versus corporate debt will influence issuer funding strategies, investor appetite, and the overall liquidity profile of the Thai fixed-income market. The interaction between policy signals, macroeconomic conditions, and market structure will remain a critical determinant of credit conditions, yield levels, and the appetite for risk across different issuer profiles in the near term.
Investor behavior and market risk management in 2025: risk appetite and discipline
Investor behavior in 2025 reflects a pronounced risk-aversion in the face of rising defaults and widespread payment delays. Market participants are gravitating toward highly rated bonds, seeking protections associated with higher credit quality and stronger liquidity. This shift reduces the market’s exposure to lower-rated or non-investment grade issuers, even as some investors maintain diversified exposures to capture potential upside in selective high-yield opportunities when risk-and-reward calculations align. In such a climate, the ability to discern true credit quality from superficially attractive yields becomes paramount. The hesitancy to engage with riskier securities is not merely a function of current defaults but also a reflection of broader concerns about earnings sustainability, liquidity resilience, and the capacity of borrowers to navigate potential refinancing or maturity cliffs in the coming years.
The risk landscape has led to the adoption of more robust due diligence practices, enhanced monitoring of covenant performance, and closer attention to liquidity metrics and cash-flow projections. For funds and institutional buyers, the emphasis on credit metrics such as debt service coverage ratios, liquidity cushions, and access to alternate financing sources becomes a central component of decision-making. This environment also encourages market participants to employ liquidity risk management tools, including scenario analysis that contemplates sudden shifts in financing conditions or policy rate changes, to gauge potential vulnerabilities in portfolios.
Within this broader risk framework, the ThaiBMA’s warning-label initiative contributes to more transparent signaling of credit risk. The labeling system—featuring categories such as failed to pay (FP), failed to pay with guarantee (FPG), default payment (DP), default not related to payment (DNP), and restructured (RS)—helps market participants identify problematic securities quickly and consistently. The potential extension of these indicators to the Stock Exchange of Thailand (SET) could further standardize risk signaling across broader Thai markets, enabling investors to make more informed allocations and to price risk with greater clarity. From a policy perspective, such standardization supports market integrity and could help reduce information asymmetries that often exacerbate volatility around periods of stress.
The investor mix—domestic versus foreign—also plays a role in shaping risk dynamics. In the first half of 2025, foreign investors were net buyers of Thai bonds, with net inflows totaling 32.3 billion baht, contributing to a broader trend of increasing foreign holdings that now reach 900 billion baht, or about 5.2% of the outstanding market value. This development suggests that international capital continues to view Thailand’s bond market as an attractive, albeit nuanced, investment universe, one where diversification benefits must be weighed against concentration risk and potential spillovers from global rate cycles. Net inflows support liquidity, which can cushion some segments of the market from distress, but inflows can also reverse quickly if global financial conditions deteriorate, underscoring the importance of ongoing risk monitoring and dynamic portfolio management.
Analysts and market participants also anticipate that the Bank of Thailand (BoT) will adjust policy rates in response to evolving inflation dynamics, growth prospects, and external conditions. A market survey by the ThaiBMA indicates that most participants expect a policy-rate cut of about 0.25 percentage points in the final quarter of 2025, reducing the rate to approximately 1.50%. This anticipated easing would likely influence yields across government and corporate debt, potentially lowering borrowing costs for issuers and contributing to a more favorable environment for refinancing. In such a scenario, the 5-year and 10-year Thai government bond yields are expected to decline by 5–10 basis points in the second half of 2025, supported by the combination of monetary policy easing, modest domestic growth, and prevailing global monetary conditions.
These expectations about policy rate moves and yield trajectories have implications for both issuers and investors. For issuers, lower yields could translate into improved debt affordability and enhanced refinancing prospects, potentially offsetting elevated default risk for some borrowers. For investors, a retreat in yields may necessitate careful yield-seeking strategies, balancing the desire for higher returns with the imperative to maintain credit quality and liquidity. The interplay between policy rates, inflation dynamics, and global rate trends remains a central driver of market sentiment and asset pricing in Thailand’s fixed-income market.
Market size, issuance trends, and the macro backdrop in 2025
The Thai bond market continues to be a substantial component of the country’s financial system. As of the second quarter of 2025, the total outstanding value of Thailand’s bond market stood at 17.3 trillion baht, representing about 93% of the nation’s GDP. This level marks an increase of 1.1% from the end of 2024 and is indicative of a market that has grown, in part, on the back of heightened government bond issuance. Government debt issuance has been a key driver of overall market expansion, while corporate bonds outstanding have declined modestly. This dynamic suggests that the government sector has been leveraging bond-market access to support fiscal and development objectives, while corporate issuers have faced more restrained or selective borrowing conditions amid liquidity pressures.
In the first half of 2025, long-term corporate bond issuance declined by 19.3% year-on-year, totaling 399 billion baht. This contraction affected both investment-grade and high-yield segments, signaling a broad adjustment in corporate debt financing activity. The decline in issuance could reflect several factors, including tighter internal capital management by corporations, a more cautious stance from lenders, and shifting investor preferences toward higher-rated assets. For those in the market, the combination of reduced corporate issuance and persistent liquidity challenges among smaller issuers reinforces the sense that risk premia may be elevated for a meaningful portion of the corporate debt universe, particularly for entities with weaker liquidity profiles.
On the international front, foreign investors continued to show net buying activity in Thai bonds during the period, with net inflows totaling 32.3 billion baht. This inflow lifted total foreign holdings to 900 billion baht, representing about 5.2% of the total outstanding value of the Thai bond market. The ongoing presence of foreign investors underscores Thailand’s role as a component of Asia-Pacific fixed-income investment strategies, even as domestic risk factors necessitate selective exposure and vigilant risk assessment. Foreign participation can contribute to liquidity and price discovery, but it also introduces exposure to global risk sentiment and exchange-rate fluctuations. The balance of these forces will continue to shape liquidity and pricing dynamics in the Thai bond market going forward.
Market expectations for yields, driven by both domestic policy and global financial conditions, point toward a potential easing of yields in the 2025 second half. The anticipated BoT rate cut, combined with a global rate environment characterized by caution and gradual normalization, supports a view that government bond yields—particularly the 5-year and 10-year maturities—could trend lower by several basis points in the latter part of the year. In addition, a softer domestic growth scenario and global monetary easing would contribute to a gradual decline in yields across the curve, though sector-specific risk factors, such as the performance of key issuers and the pace of default and deferral recoveries, will continue to influence yield curves and risk premia associated with corporate debt.
For issuers and investors, these market size and issuance trends underscore the need to adapt to a financing landscape that is increasingly defined by stability considerations, risk-aware pricing, and a nuanced understanding of liquidity dynamics. The growth in the overall market, tempered by a decline in corporate issuance, suggests a rebalancing process in which government debt strengthens its role in financing needs while corporate market participants reassess funding strategies, risk exposure, and cash-flow management. The evolving macro context—characterized by moderate growth, policy-rate expectations, and global rate expectations—will continue to shape both supply and demand in the Thai debt market as 2025 progresses.
International investment, rate outlook, and yield expectations
The Thai bond market in 2025 has seen consistent participation from foreign investors, who have remained net buyers in the Thai debt space. The net inflows of 32.3 billion baht during the first half of the year contributed to a rise in foreign holdings, bringing total foreign ownership to 900 billion baht and representing roughly 5.2% of the total market’s outstanding value. This level of foreign participation provides important liquidity support for Thai bonds, particularly in periods of domestic risk, while also exposing the market to external shocks and shifts in global risk appetite. The net inflow environment indicates continued international interest in Thai fixed income, but it also implies that any sudden change in global financial conditions or shifts in risk sentiment could provoke volatility in the Thai bond market.
Market participants broadly project that the Bank of Thailand will reduce its policy rate by 0.25 percentage points in the final quarter of 2025, bringing the policy rate down to approximately 1.50%. This expected easing is part of a broader forecast that includes a softening trend in government bond yields, with the Thai 5-year and 10-year government bond yields anticipated to fall by about 5–10 basis points in the second half of 2025. The convergence of policy rate cuts and forecast rate declines is expected to support a more accommodative financing environment, potentially benefiting both government and high-quality corporate issuers. At the same time, the expectations about rate trajectories should be evaluated in light of domestic growth trends and external macro developments, which can modulate how quickly yields respond to policy shifts.
The projected yield declines are contingent on several factors, including the pace of inflation, the strength of domestic growth, and the global cost of capital. A modest growth trajectory paired with monetary policy easing is typically conducive to lower yields, especially on longer tenors, as investors price in a lower term premium and a lower expected path for future policy rates. However, if inflation proves more persistent or global financial conditions tighten, yields could stabilize at higher levels or experience only a partial decline, complicating debt service calculations for some issuers and influencing asset allocation decisions for investors. The interplay between inflation dynamics, growth signals, and policy rate expectations will thus continue to shape the risk-return profile of Thai fixed income assets through the remainder of 2025 and into 2026.
In sum, the 2025 outlook for the Thai bond market will be shaped by a combination of structural factors—such as the size and composition of the market, ongoing liquidity dynamics among smaller issuers, and the role of government debt—as well as policy-driven and global influences that will determine the direction of interest rates, yields, and risk premia. Market participants should remain vigilant to shifts in liquidity conditions, credit risk signals, and macroeconomic developments while leveraging labeling regimes and enhanced disclosure standards to navigate a market that remains large, complex, and highly sensitive to both domestic and international financial conditions.
The policy and transparency push: risk signaling and investor education
A notable development in 2025 is the ThaiBMA’s introduction of warning labels designed to enhance investor awareness of bond credit risk and payment performance. The labeling framework includes five categories: failed to pay (FP), failed to pay with guarantee (FPG), default payment (DP), default not related to payment (DNP), and restructured (RS). These signals provide a standardized lexicon for describing the status of bonds in distress, enabling investors to quickly assess risk profiles and make more informed decisions. The labels can improve transparency by clarifying the underlying conditions that impact a bond’s ability to meet its payment obligations and the probable restructuring or remediation paths that may follow a default event. The ThaiBMA chair and executives have indicated that there is consideration of adopting these risk indicators beyond ThaiBMA’s own market to the broader sets of securities listed on the Stock Exchange of Thailand (SET). If extended to SET-listed bonds, the labeling system could create a more cohesive and consistent approach to risk signaling across Thai capital markets, fostering greater comparability of risk metrics for investors.
The labeling initiative aligns with broader market transparency goals and may contribute to more efficient price discovery. By reducing information asymmetry and accelerating the dissemination of timely, standardized indicators, the market can incorporate risk expectations into prices more effectively. For issuers, such signaling can incentivize improved disclosure, stronger covenant compliance, and proactive communication with investors during periods of stress, potentially mitigating panic-driven price moves and facilitating orderly restructurings when necessary. For investors, improved visibility into credit risk can support more precise portfolio construction, targeted hedging strategies, and a more disciplined approach to bond selection, particularly in a market where delays and defaults are becoming more salient.
From a policy and market design perspective, the risk-label framework might be complemented by additional disclosures, stress-test requirements, and enhanced covenant monitoring to complement the labels. Over time, this could help create a more robust and resilient bond market that better absorbs shocks and supports efficient capital allocation. The goal is to foster an environment in which both issuers and investors can navigate stress with greater clarity and less ambiguity, reducing the likelihood of abrupt margin calls or liquidity squeezes that can exacerbate financial distress.
Market implications for issuers, investors, and policymakers
The 2025 data on defaults and delinquencies, coupled with the market’s size and foreign participation, collectively shape a nuanced outlook for Thailand’s fixed-income landscape. For issuers, the key takeaway is the importance of maintaining robust liquidity buffers, effectively managing refinancing risk, and ensuring transparent communication with investors and lenders. The narrower margin for error among smaller issuers suggests that targeted liquidity management strategies, such as contingency funding lines and more disciplined capital allocation, will be critical to navigate the anticipated environment of elevated credit risk and potential rate volatility.
Investors face a recalibrated risk-reward calculus. The combination of lower issuance volumes in the corporate space and a still-large government bond universe means that returns must be evaluated against the backdrop of potential defaults and deferred payments. Credit selection becomes more granular, and risk management must be enhanced through diversified holdings, active monitoring of issuer-specific liquidity, and the use of risk signals such as the ThaiBMA’s labeling system to identify and avoid high-risk securities. The broader implication is that the debt market is moving toward a more differentiated structure where issuer quality, liquidity resilience, and access to refinancing become central determinants of pricing and yield.
For policymakers and market regulators, the current phase underscores the importance of maintaining transparent data reporting, ensuring the reliability and timeliness of market information, and supporting policy measures that facilitate orderly funding and debt servicing for viable issuers. The ThaiBMA’s labeling framework and its potential extension to the SET signal a direction toward standardized risk public signaling, which can contribute to market stability by reducing information gaps during periods of stress. Policymakers might also consider complementary measures aimed at strengthening the corporate sector’s resilience, such as targeted liquidity facilities or programs that support refinancing options for issuers facing near-term maturities, while ensuring that such interventions are structured to avoid moral hazard and maintain market discipline.
The long-term trajectory for Thailand’s bond market will depend on how effectively the market, regulators, and policymakers can align incentives to support sound credit management, encourage prudent financing practices, and maintain investor confidence in a market that remains deeply integrated with the broader economy. By continuing to emphasize transparency, risk signaling, and disciplined risk management, Thailand can seek to stabilize the bond market, support productive investment, and sustain a balanced approach to growth that withstands cyclical fluctuations and regional dynamics.
Conclusion
The Thai bond market in 2025 is navigating a period of elevated stress, driven by rising defaults and widespread payment delays among smaller issuers amid a slower economy. The early half of the year has showcased a combination of a few high-profile defaults (notably among CHO, CV, WRX, and GRAND) and a broader wave of deferrals across a diverse set of issuers, totaling substantial sums and signaling a liquidity challenge that extends beyond a single sector. The data from 2023, 2024, and the first half of 2025 illustrate a cycle in which delays have sometimes eclipsed outright defaults, highlighting the persistent liquidity fragility that can emerge in the face of macroeconomic headwinds and a cautious investment climate.
Investor sentiment remains risk-averse, with a preference for highly rated bonds, and the market is actively seeking greater transparency and timely risk signals to inform decision-making. The ThaiBMA’s warning-label framework represents a proactive step toward clearer risk signaling, with potential expansion to SET-listed bonds that could harmonize disclosures across capital markets and support more informed investment choices. The market continues to benefit from sizable government bond issuance and stable foreign participation, which help sustain liquidity even as corporate issuance contracts and liquidity pressures intensify for smaller issuers. The combination of policy-rate expectations, anticipated yield movement, and macroeconomic conditions suggests a nuanced path forward: while yields may ease modestly in the latter part of 2025, the extent will be tempered by ongoing liquidity dynamics and the credit quality of issuers.
For issuers, the core imperative is to manage liquidity and sovereign risk within a framework that prioritizes transparent, proactive engagement with investors and lenders. For investors, the focus should be on rigorous credit analysis, disciplined risk management, and a willingness to adapt to evolving risk signals in a market that is increasingly characterized by diversification of risk and heightened awareness of liquidity constraints. Policymakers and market regulators should continue to reinforce transparency, strengthen market signals, and consider targeted measures that support viable issuers while preserving market discipline.
In this evolving environment, the Thai bond market remains a critical component of Thailand’s financial system. It provides an essential channel for corporate financing and government funding, while demanding heightened attention to credit risk, liquidity dynamics, and macroeconomic developments. The coming months will be telling as the market processes the implications of defaults and deferrals, interprets policy rate moves, and absorbs shifts in global financial conditions. The path ahead will require ongoing collaboration among market participants, regulators, and policymakers to ensure that the Thai bond market continues to function effectively, efficiently, and with the transparency needed to sustain confidence and long-term investment.
