The Asian Development Bank (ADB) has launched its inaugural baht denominated bond with a Bt4 billion ($100 million) bullet offering. The deal represents the first internationally rated triple-A deal to come out of Thailand and the first triple-A rated asset available to domestic investors.
The five-year deal was priced at par with a semi-annual coupon of 3.87% to yield at 17bp over the interpolated government bond yield curve. The notes were pitched to investors on a range of 15bp to 23bp over.
Joint lead managers Citigroup and Siam Commercial Bank felt able to sell the deal comfortably at the 17bp level having garnered an order book of Bt7.9 billion. On a post swap basis the deal was said to have priced in line with the suprantional's sub libor funding target of minus 30bp.
"Despite having only 24 hours notice, we were able to get 60 investors in for the road show on Friday" says John Pitfield, head of syndicate local currency at Citigroup. ADB was not permitted to approach potential investors until Thai regulators had approved the deal on Thursday.
All 60 investors bought into the deal, with almost a third of the book going overseas. The deal was split among onshore and offshore banks, insurance companies, pension funds and providence funds.
However, providence funds were restricted to only a limited amount of paper as ADB is still classified as a corporate issuer in Thailand. They are not allowed to invest more than 15% of NAV in corporate bonds.
The deal marks the third market ADB has opened in the past 15 months, following transactions in India and Malaysia.
The supranational is now looking towards China where it has an application pending for debut deal.
It also hopes to return to the Thai market now that it has established a regulatory standards for disclosure, documentation, clearing and settlement. However, officials say the next tap is likely be a longer tenure, depending on market conditions.
Proceeds from the deal will help finance construction projects in Thailand and Laos, including the Lao-based Nam Thuen 2 Hydroelectric plant.
