Ratchathani Leasing to issue Bt20-bn debenture
Ratchathani Leasing's board has given the green light to issue a Bt20-billion debenture in order to lower financial costs and bolster working capital.
The debenture, which the board has until April next year to issue, is additional to the Bt6-billion debenture approved previously and which is open for offering to individual investors during April 24-26 and to institutional investors during April 24-27.
Chairman Virat Chinprapinporn said yesterday that proceeds from the Bt6-billion debenture would help the company lower its financial costs by 0.05 per cent this year, as targeted.
For the additional debenture of Bt20 billion, half of the amount might be issued this year, depending on market sentiment, he said.
The recently approved Bt6-billion debenture is to be divided into three tranches, not exceeding Bt2.5 billion each. The first tranche will have a two-year maturity with an annual yield of 4.9 per cent; the second will have a three-year tenure with a yield of 5.2 per cent annually; and the last will have a four-year maturity with a yield of 5.5 per cent.
The debenture has received a credit rating of BBB+ from TRIS Rating. Thanachart Bank, Thanachart Securities, KT Zmico Securities, CIMB Thai Bank and Trinity Securities are the underwriters.
Virat said proceeds from the debenture could be used to pay off Bt5 billion of Ratchathani Leasing’s debt, which is half of what it currently owes, while the remaining Bt1 billion would be used for auto lending.
Funds from the issuance and the company’s current credit line are enough to support auto-financing operations of Bt800 million per month, he added.
With the company projecting loan growth of 30 per cent per annum, it needs sources of funding apart from credit lines from financial houses, include the Bt3-billion line from Thanachart Bank, the chairman said.
After issuing the Bt6-billion debenture this month, the proportion of loan and bond issuance will be 50:50, against the previous 60:40.
Virat said the company this year would aggressively aim to capture auto-financing business in the used-commercial-truck segment, as the market has relatively few players and offers a higher margin.
The margin for used commercial vehicles is 6-15 per cent, against just 4-6 per cent for new commercial trucks.
Last year’s floods hit local truck-makers’ production capacity, resulting in used trucks becoming the preferred choice for businesses seeking to buy commercial vehicles.
He said overall sales of new trucks this year are expected to reach 40,000 units, while used-truck sales are expected to come in at 50,000 to 60,000.
Ratchathani Leasing is ranked in the top three auto-financing companies for used trucks, with a market share of 18-20 per cent.
Truck business accounts for 70 per cent of the company’s outstanding loans of Bt12 billion. The company targets outstanding lending to increase to Bt16 billion by year-end.
