TRIS Rating assigned a “BB+” rating with a “Stable” outlook to the Lao People’s Democratic Republic’s (Lao PDR) proposed senior unsecured debentures of up to THB1,371.5 million due within three years. The rating agency also affirmed Lao PDR’s sovereign credit rating and existing senior unsecured issues at “BB+” with a “Stable” outlook on 21 August 2026.
Proceeds from the proposed debenture issuance are designated to refinance existing debentures maturing in November 2026. The assessment balances Lao PDR’s political stability and ongoing macroeconomic improvements against near-term debt servicing commitments, modest financial buffers, liquidity management risks, and high foreign-currency debt.
Macroeconomic Growth and External Position
During the first half of 2026 (1H26), real Gross Domestic Product (GDP) in Lao PDR expanded by 5.0%, outpacing the full-year projection of 4.2%. The Consumer Price Index (CPI) averaged 7.9% across the first seven months of the year, tracking below the full-year forecast of 15%. Over the same period, the Lao kip depreciated by approximately 4% against the US dollar.
The nation’s external metrics showed foreign exchange reserves—including the swap facility with the People’s Bank of China—increasing to USD4.25 billion in May 2026 from USD3.5 billion at the close of 2025. In 1H26, the current account surplus stood at USD594 million, while Foreign Direct Investment (FDI) inflows reached USD704 million.
Fiscal Performance and Debt Service Structure
Preliminary data from the Ministry of Finance of the Lao PDR indicates a fiscal surplus of LAK15 trillion in the first half of 2026, exceeding initial forecasts. Government revenue collection reached 54% of the annual budget during 1H26, whereas public expenditure accounted for approximately 41%.
Total external public debt was recorded at USD10.96 billion at the end of 2025. Following bilateral debt rescheduling and domestic debt rollovers, remaining principal repayments from August to the end of 2026 stand at approximately USD570 million, compared to the original schedule of USD1.6 billion.
#LaoPDR #TRISRating #Debentures #SovereignRating #Economy #Bonds
