Perpetual bond issuance all the rage in Thailand, but changing accounting standard may threaten parade

(Oct 28): A recent increase in the issuance of perpetual bonds in Thailand seems to be linked to local companies’ desire to lock in low interest rates, but the new accounting standards coming into effect next year signal something much more intriguing.

Perpetual bonds, also known as hybrid bonds, have no fixed maturity date and get treated as equities rather than debts. These fundraising instruments, which carry more risk than a company’s usual senior debt, are popular because they can return an average of 5%.