Thailand raises $1 billion ....

... but many wonder what''s the point?

The Kingdom of Thailand returned to the international bond markets for the first time in a year yesterday Thursday with its largest deal to date. Yet to describe the $1 billion transaction as a bond would be a complete misnomer, since it closely resembles a Japanese club loan and is as far removed from benchmark status as a sovereign bond could possibly be.

Backed by a Baa1BBBBBB rating, the three-year FRN has a one-year call option and was priced at 99.94% to yield 13.5bp over six-month Libor.

Pricing was so ridiculous that lead manager Barclays Capital could only muster $860 million in demand, leaving $140 million sitting on its...

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