COVID-19 has rattled Laos’ debut in selling a U.S. dollar bond in international markets, adding pressure on a country whose “Wild West of dam building” splurge has put it in a precarious repayment situation, especially in regard to China, its leading lender.
Sources familiar with the banking system in Laos, one of Southeast Asia’s poorest countries, say the government has adopted a “wait and see” stance before proceeding with the bond sale. “The central bank has still to confirm if the bond sale will go ahead this year,” one source said.
The country’s turn to international markets was signaled in January, after Laos received its first rating of B3 from credit rating agency Moody’s. It came four years after Laos sold $182 million in U.S. dollar bonds in two tranches to institutional investors in Thailand. Laos has also issued sovereign bonds denominated in Thai baht to fill its coffers.