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ADB Issues Debut Thai Baht Bonds

MANILA, PHILIPPINES (18 May 2005) - ADB issued today its debut Thai baht bonds in the domestic capital market of Thailand, with a principal amount of THB4 billion and a bullet maturity of five years. The lead arrangers were Citigroup and Siam Commercial Bank.

The issue represents ADB's third market-opening transaction in the region in just over a year, following bond issues in India and Malaysia in February and November 2004, respectively.

Priced at par, ADB's baht bonds carry a semiannual coupon of 3.87% per annum and were priced at a spread of 17 basis points over the five-year Thai Government Security. Before launching the issue, ADB and the lead arrangers conducted an extensive road show in Bangkok to present the deal to key institutional investors.

Offered through a bookbuilding process, the issue generated strong demand and was nearly twice oversubscribed. The issue was broadly distributed to institutional investors, including banks, pension funds, and asset managers. The issue also attracted significant international interest with offshore investors allocated about one third of the issue.

ADB's baht bond issue represents many firsts in the Thai capital market: first issue by a foreign entity; first supranational issue; and first issue rated triple-A by Fitch, Moody's, and Standard & Poor's.

"After ADB's market opening transactions in India and Malaysia last year, the Thai Baht bond issue represents another milestone in ADB's quest to develop regional bond markets," says ADB Vice-President Khempheng Pholsena.

"The bond issue also underscores ADB's confidence in the Thai capital market. This, together with the new standards created through this issue in terms of regulatory framework and documentation, will facilitate issuance by other international borrowers in Thailand."

In addition, the issue will help attract international investors to the Thai bond market as well as enhance liquidity in the cross-currency swap market. ADB has executed related cross currency swap transactions to convert the bond proceeds into US dollars.

"ADB would like to thank the Thai Government for its extensive support in making this market-opening transaction possible," ADB Treasurer Mikio Kashiwagi says. "ADB is particularly pleased to have been given the opportunity to be the first foreign issuer in the Thai bond market."

Jeremy Amias, Citigroup's Head of Global Fixed Income, Asia Pacific says the transaction strengthens its relationship with Siam Commercial Bank, the Kingdom of Thailand, and ADB.

"Citigroup is delighted to have arranged with Siam Commercial Bank this transaction, which is the culmination of more than two years work," he says. "It is a major step forward in the development of the Thai capital market and in line with the Government and ADB's strategies as outlined in the Asian Bond Market Initiative."

Khunying Jada Wattanasiritham, the President of Siam Commercial Bank, adds that the deal is a prestigious one for her bank, which has a distinguished track record and an extensive market coverage network of institutional and retail investors. "We are proud not only to be offering our investors these premium bonds but also satisfying issuers with competitive pricing," she says.

The Asian Development Bank is dedicated to reducing poverty in the Asia and Pacific region through pro-poor sustainable economic growth, social development, and good governance. Established in 1966, it is owned by 63 members, with 45 from the region. In 2004, it approved loans and technical assistance totaling $5.3 billion and $196.6 million, respectively.

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