Large Thai corporations are increasingly keen on launching Asean currency bonds with the aim of raising their profile among regional investors and tapping lower financial costs.
SET-listed CIMB Thai Bank (CIMBT) has several deals for both financial institutions and corporations offering bonds in Singapore dollars or Malaysian ringgit in the pipeline, said Pornchai Padmindra, a senior executive vice-president and head of the wholesale banking group.
A Thai conglomerate is studying launching structured debentures in Singapore dollars, he said without mentioning the name.
Part of the proceeds from the issuing structured debentures would be swapped into baht to expand its business here, while the rest will fund the conglomerate's international operations, Mr Pornchai said.
Financial cost is not the main factor encouraging local corporations to raise funds through the Asean bond market. Investor and customer base expansion as well as brand awareness in the international market are also important.
"Large corporations with an investment credit rating of at least BBB can mobilise massive amounts of baht issuing bonds locally, but doing so in the international market supports their international business expansion in the long run," Mr Pornchai said.
CIMBT, 93.15% owned by Malaysia's CIMB Group, has been appointed as underwriter for Krungthai Bank's 1-billion-ringgit (9.13 billion baht) 10-year subordinated debt, priced to yield 5.1%. That yield would have translated to low 4% post-swaps in baht terms.
In another development, Mr Pornchai said CIMBT had 25-30 Asean-related investment banking deals in the pipeline this year worth 70-80 billion baht.
CIMBT targets healthy revenue growth for its corporate banking business, particularly non-interest revenue. It targets 40% revenue growth in wholesale business this year after it delivered 42% growth in the first half to between 1.5 and 1.6 billion baht.
The small bank also targets loan growth of 15% this year after a 7-8% first-half expansion, although corporate loan growth is not its focus.
CIMBT shares closed yesterday on the SET at 1.63 baht, down three satang, in light trade worth 218,000 baht.