BANGKOK, THAILAND - ADB has priced its second Thai baht (THB) bonds in the domestic capital market of Thailand. The issue has a total principal amount of THB6.5 billion and consists of two tranches: a 5-year THB5.5 billion tranche, and a 10-year THB 1 billion tranche. The lead arrangers of the issue were Standard Chartered Bank (Thai) and Bank of Ayudhya.
Priced on 14 September 2006, the five-year tranche carries a semiannual coupon of 5.34% per annum and was priced at a spread of 20 basis points over the interpolated Thai government bond curve. The ten-year tranche carries a semiannual coupon of 5.54% and was priced at a spread of 25 basis points over the interpolated Thai government bond curve. Before launching the issue, ADB and the lead arrangers conducted a road show in Bangkok to present the deal to key institutional investors.
"After ADB's market opening transactions in Thailand last year, our return to the Thai Baht market represents another important step in ADB's quest for developing regional bond markets," ADB Vice-President Kempheng Pholsena said.
The Thai Baht issue was launched in conjunction with the establishment of ADB's $10 billion Asian Currency Note Programme, announced yesterday in Singapore. The programme is Asia's first multi-currency platform since the Asian financial crisis that links the domestic capital markets in the region under a single unified framework with a common set of documents under English law.
"The Thai Government has provided its in-principle approval for including Thailand in the Programme in the near future", said Vice-President Pholsena.
The bond issue underscores ADB's confidence in the Thai capital market and will help to enhance liquidity in the cross-currency swap market, particularly as ADB plans to undertake currency swap transactions for asset and liability management purposes.
"ADB would like to thank the Thai Government for its extensive support in making this transaction possible," ADB Treasurer Mikio Kashiwagi said. "ADB is particularly pleased to have been given the opportunity to be the first foreign issuer to return to the Thai bond market."
Mr. Sanit Rangnoi, Deputy Permanent Secretary said that "The issuance of Baht-denominated bond by ADB in Thailand marks yet another important milestone in the development of the Thai bond market. With this issuance, we have added a high-quality product in our bond market for investors, local as well as foreign wishing to invest and diversify their portfolio."
Mr. Deepak Kohli, Global Head of Fixed Income Origination, Standard Chartered Bank added that "The bonds were structured into two tranches with tenors of 5 and 10 years to maximize demand and capture a broad spectrum of investors in the market. Through this approach, we managed to secure strong investor demand. With ADB's strategy to developing the bond markets in the region, we are proud to have led ADB's return to the Thai market as bookrunner and lead manager."