PTTEP launches first hybrid debt instrument

 Offering interest of 5.85-7.85 per cent per annum, payable every 3 months, the issue is the country’s first-ever alternative long-term investment offered by non-financial institution.
 Rated “AA” by TRIS Rating, the instrument is available for subscription during June 11 – 14 at Krung Thai Bank, Kasikornbank and  Siam Commercial Bank. Minimum subscription is Bt100,000.
 "PTTEP is the first non-financial institution who offers hybrid debt capital instrument as an alternative long-term investment for investors," said Penchun Jarikasem, PTTEP’s Executive Vice President of the Finance and Accounting Group.
 The instrument is subordinated, unsecured and unconvertible with bullet payment and single redemption upon liquidation of the issuer. The issuer has the right to redeem all debentures on the 10th anniversary and every interest paid thereafter or other conditions as mentioned in the terms and conditions of the debentures. The issuer has its sole right and discretion to defer any interest payment and is not subject to any limit as to the number of times the interest can be deferred.
 The proceeds will be used as the working capital of the company.  The proposed stepping interest rate is offered at 5.85 per cent for the first 10 years, 6.10 per cent for Year 11 to 30, 6.85 per cent from Year 31 to 60 and 7.85 per cent from Year 61 onwards.
 The hybrid issue is launched just when three global rating agencies - Standard & Poor's Ratings Service, Moody's Investors Service, and Fitch Rating - expressed concerns over PTTEP's future leverage following its huge capital expense programme. Moody's last week assigned negative outlook for PTTEP's rating, as it submitted a new bid for Cove Energy Plc, which at 1.221 billion pound sterling is 25 per cent higher than the previous bid submitted in February.