SEC urges discretion from investors of PTTEP debt-capital issue

The Securities and Exchange Commission urged potential investors of PTT Exploration and Production’s hybrid debt-capital instrument to seek as much information as possible about the issue before making a decision on investment.

In a statement, the watchdog said that it had received a number of questions over the terms and conditions of the issue.

“The issue contains far-more-complex conditions than debentures in general.

Should the issuer exercise the call option or defer interest payment, the return would be lower than the nominal interest rate. Before making any investment decision, the SEC urges all to thoroughly study the information in the fact sheet, which is available at points of sale. This is to understand the full features of the issue and evaluate your tolerance to associated risks,” the SEC said.

PTTEP will start selling the hybrid debt-capital instrument worth Bt5 billion today, through Krung Thai Bank, Kasikornbank and Siam Commercial Bank branches.

Rated “AA” by Tris Rating, the issue offers an interest yield of between 5.85-7.85 per cent payable every 3 months.

Dubbed as the country’s first-ever alternative long-term investment offered by a non-financial institution, the instrument is subordinated, unsecured and non-convertible with bullet payment and single redemption upon liquidation of the issuer, and have the debenture-holder’s representative.

The issuer has the right to redeem all debentures in the 10th year and all interest paid thereafter or other conditions as mentioned in the terms and conditions of the debentures. The issuer has the 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.