Thanachart unit, CIMB Thai plan bond issues
Two lenders plan to issue senior bonds to replenish liquidity for lending and to fortify their capital base.
Ratchathani Leasing, a subsidiary of Thanachart Bank, will offer Bt3 billion of unsecured debentures to both general and institutional investors from October 29-31 with the minimum subscription set at Bt100,000. The four-year bonds carry a coupon rate of 5 per cent, with interest paid every three months.
The debt issue is rated “BBB+” by Tris Rating. Thanachart Bank is the lead arranger and underwriter, while KT Zmico Securities is also an underwriter.
Kovit Rongwattanasophon, managing director of Ratchathani Leasing, said yesterday that the attractive return combined with short maturity would draw institutional investors and the public.
This fund mobilisation is in line with the company’s plan to look for sources of funds with lower cost from domestic financial institutions and the general public to support loan expansion, he said.
Interest payable and loan fees in the third quarter increased by 20.62 per cent year on year to Bt169.93 million. The higher cost reflected an expansion in hire-purchase loans, the company said in a filing to the Stock Exchange of Thailand.
However, loan expansion in the quarter benefited the bottom line, which gained 131.5 per cent to Bt153.80 million from Bt66.44 million in the same quarter last year.
Its outstanding hire-purchase loans rose to Bt16.81 billion from Bt12.05 billion.
CIMB Thai Bank will issue unsecured subordinated debentures of up to Bt1.5 billion, with an option for Bt1.5 billion. The bonds, which mature in 10 years, are rated “A+” by Fitch Ratings (Thailand).
The proceeds will be used to strengthen the bank’s Tier 2 capital. The subordinated debentures are rated one notch below CIMBT’s national long-term rating to reflect their subordination in the capital structure and are in line with Fitch’s approach to rating such subordinated debt instruments of financial institutions.
Fitch believes that should parental support be required by CIMBT, this would also extend to these subordinated debt instruments. CIMBT is strategically and operationally integrated with CIMB and has close name association with the parent.
