Thaioil Successfully Issues and Offers USD Debentures.

Mr. Wirat Uanarumit, Chief Executive Officer and President, Thai Oil PCL, disclosed that “The company has successfully issued and offered USD senior unsecured and unsubordinated debentures worth USD 565 million recently. The proceeds of the debentures will be used to support the company’s investments including Clean Fuel Project (CFP), strengthening its financial position during the time when interest rates are low worldwide and the current global economic situation is uncertain.” “The debentures issue has been rated by Standard and Poor’s and Moody’s with BBB+ and Baa1 ratings respectively. The debentures is of 30-year maturity with a record-low fixed coupon rate of 3.50 % per annum and has Thailand’s lowest coupon during the last 30 years. It also offers the lowest coupon rate among the BBB rated (Investment Grade) companies in Asia last year. After its offering to foreign institutional investors, Thaioil’s debentures generated significant interest from the market, reaching a demand of up to USD 1.5 billion during the first two hours of offering, gaining a subscription of over USD 3,700 million or 6.5 times of the initial issue size. The debentures issue and offer are arranged by ANZ, BofA Merrill Lynch, Citigroup (B&D), Standard Chartered Bank, BNP PARIBAS, and HSBC. The pricing date was on 9 October 2019 and the debentures settlement date will be on 17 October 2019.” Mr. Wirat added that “Due to the current refinery and petrochemical industry situation in Asia where there are a lot of newly-opened refineries and petrochemical plants while the global economy is slowing down, oil demand is falling. However, the debentures market situation and worldwide lower interest rates, with long-term interest rates, based on those of U.S. government debentures, hitting the record-low in a decade, have caused companies with a strong financial position like Thaioil to have a low credit spread. Also, investors want to invest in Thai long-term debentures and, in the past, only a few Thai companies had been able to issue and offer USD debentures. Therefore, the company is taking advantage of this opportunity to issue and offer debentures according to its long-term pre-funding strategy to support its various investment projects, especially the Clean Fuel Project, through the Global Medium Term Note (GMTN), a program that enables the company to be prepared and ready to capture market opportunities in short period of time. This allows the company to reach investors widely and promptly amid the fluctuating financial market and interest rates and also enables it to raise capital through debentures offering with a record-low coupon rate.”