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Laos Issues First US$ Notes In Thailand

The dual-tranche issuance was rated “BBB+” by Tris Rating on December 9. The maturities are 10 and 12 years and the coupons are six-month Libor (London Interbank Offered Rate) plus 3.38 percentage points and 3.48 percentage points.

The notes were distributed to institutional investors under the Thai Securities and Exchange Commission’s foreign-exchange bond regulations.

The success of this transaction highlights the Laotian government’s strong credit as an issuer in the increasingly integrated intra-regional capital markets as well as the depth, strength and liquidity of Thailand’s debt capital markets, Rithikone Phoummasack, deputy director-general of External Finance Department of the ministry, said yesterday.

The ministry first issued unrated Bt1.5-billion baht-denominated bonds in Thailand in May 2013, followed by three more baht issuances.

The last one, which was completed this past June, was a Bt12-billion baht-denominated issuance rated “BBB+” by Tris Rating. This US-dollar bond transaction is yet another milestone for the ministry in many aspects.

From the Laotian government’s perspective, this marked the first time the ministry raised US dollars from offshore debt markets.

The ministry also took advantage of favourable market conditions, setting the most competitive 10- and 12-year floating-rate benchmarks for the Laotian government for future issuances.

The 12-year tranche became the longest-dated bonds ever completed by the Laotian government.

From Thailand’s debt market’s perspective, this was the first time that any foreign issuer raised US dollar-denominated bonds in Thailand.

This transaction was the first US dollar-denominated floating-rate note transaction ever completed in Thailand. The 10-year tranche, amounting to $162 million, also became the largest 10-year forex bond transaction ever completed in Thailand. This transaction was targeted at financial institutions and insurance companies.

Ultimately, most of the transaction was booked by a new group of investors, such as specialised financial institutions, underlining the strength of the Laotian government’s credit among the investing community in Thailand, he said.

Twin Pine Consulting Co was the sole adviser, Kasikornbank and Krungthai Bank were the joint lead arrangers and LS Horizon Ltd was the legal counsel.

Adisorn Singhsacha, managing director of Twin Pine Consulting, said this transaction had solidified the status of the Thai debt markets as the leading Asean capital markets. Thailand again has shown the sophistication and depth of its capital markets supported by strong investor appetite and market liquidity.

Source: The Nation