Document Type

Case Study

Case Series

Market Support Programs

JEL Codes

G01, G28


Early in the COVID-19 crisis, non-financial businesses grew concerned that they would be unable to roll over their maturing bonds. To calm corporate debt markets, the Bank of Thailand (BOT) announced the Bond Stabilization Fund (BSF) on March 22, 2020. The BSF planned to purchase newly issued commercial paper from viable companies that could not roll over their maturing bonds. However, the program was not used. The BOT, seeking to avoid public criticism for directly supporting large corporations, imposed restrictions that made the program less attractive to borrowers. The main deterrent to participation was the requirement that borrowers must have already secured at least 50% of their funding needs from other sources. The BSF also charged a penalty rate that increased as its involvement increased. Last, participants could not, for the duration of the bond, buy back their stock, repay other debts early, pay bonuses, or distribute dividends. The BSF stopped accepting applications from participants at the end of 2022.

Date Revised