The Credit Guarantee and Investment Facility (CGIF), a trust fund set up by the Asian Development Bank (ADB), supported SNC Former Public Company Limited of Thailand in its inaugural bond offering amounting to one billion baht (US$30.4 million).
CGIF provided a 100% credit wrap for the five-year bond, which was rated AAA by TRIS Rating and placed with domestic institutional investors at a competitive coupon rate of 3.10%.
The guaranteed bond was issued on January 27 under the Asean+3 multi-currency bond issuance framework, a policy initiative under the Asian Bond Markets Initiative (ABMI) to standardize the bond and note issuance processes for the purpose of strengthening bond market linkages among the Asean+3 countries.
UOB (Thai) acted as the sole lead arranger for the transaction.
CGIF chief executive officer Hongwei Wang says SNC Former stands to benefit from the inaugural bond issuance as it diversifies its funding sources to support its sustainable growth.
Since inception, CGIF has supported 12 bond issuances in the Thai debt capital market, including this transaction, which were successfully placed with institutional investors on the back of CGIF’s strong financial strength and the superior credit rating.
“The successful issuance of this bond also demonstrates the market participants’ confidence in CGIF and its guarantee product. Thailand, with a fast-growing economy and huge growth potential, has been one of CGIF key focus markets and we will continue to expand our presence in the Thai bond market and to support new bond issuances in Thailand,” adds Wang.
SNC Former founder and CEO Somchai Thaisanguanvorakul says his company strives to grow sustainably and is committed to creating positive and environmentally-friendly impact on the industrial materials and machinery sector.
UOB (Thai) executive director and country head of debt capital markets Pisal Kattiyothaivong notes that CGIF’s full guarantee not only helps SNC Former in reaching out to several leading institutional investors, but also in extending the tenor of its bond to five years from the usual two to three years for non-rated bonds.
CGIF is a multilateral facility established by the Asean members, China, Japan, South Korea and the ADB. It was set up by the ADB to develop and strengthen local currency and regional bond markets in the Asean+3 region.
CGIF, which commenced its guarantee operations on May 1 2012, seeks to provide credit enhancements, mainly in local currencies, issued by credit-worthy Asean+3-domiciled bond issuers.
Established in 1994, SNC Former comprises 14 companies located in the provinces of Samut Prakan and Rayong. Its key business operations can be classified into four groups: manufacture and assembly of electrical appliances and toolboxes; manufacture and sale of electrical equipment parts, including those for air conditioners, refrigerators, and washing machines; manufacture and sale of air conditioning equipment parts used for vehicles and vehicle equipment parts; and other operations including mold manufacturing and distribution, as well as metal tools and equipment.