Strong demand for second thai bath bonds from diverse investor base
The Agence Française de Développement (AFD or French Development Agency), a public development-finance institution, announced the successful completion of its second Thai Baht Bond issuance to investors in
With the solid credit history of AFD - “AAA” credit rating by Standard & Poor’s and Fitch Ratings, together with its continuous commitment of ongoing projects in Thai financial community, the bonds were well received by various types of institutional investors who are looking for high credit quality papers. The firm order book allowed AFD to launch its bonds at THB 4.0 billion which is the maximum approval limit as permitted by the Ministry of Finance of
The bonds were divided into two tranches - 3-year THB 2.2 billion and 7-year THB 1.8 billion bonds. The coupons for the 3-year and 7-year tranches were determined at 3.40 per cent and 4.60 per cent per annum respectively, implying very tight spreads of 72 basis points and 101 basis points over comparable government yields.
The transaction enabled AFD to achieve both desired issue size and target cost of funding, while provided AFD opportunities to expand the investor base in Thai Baht bond markets.
HSBC has been entrusted to act as the Sole Bookrunner and Sole Lead Manager of this transaction after successful arrangement of AFD’s debut Thai Baht Bonds last year.
The success of the transaction demonstrated HSBC concrete relationship with the client and further demonstrate HSBC’s strong franchise in emerging markets and its capacity to manage and execute cross boarder transactions.