Bangkok--Mar 16--AJF
Mr. Reungvit Nandhabiwat, the Managing Director of Ayudhya Jardine Fleming Asset Management (AJF), said that his company had received an approval from the SEC to launch a new mutual fund. This Baht 30 billion, closed-end fund that has no maturity date will be offered to institutional investors as defined by the SEC. Individual investors who would like to invest in this fund must invest at least Baht 10 million. The offering period is between Mar, 10-16, 1999 at the price of Baht 10/unit.
Mr. Reungvit inentioned that this new fund was different from other mutual funds that AJF currently managed in that it invested in only two securities with equal portion : the bank of Ayudhya's Stapled Limited Interest Preferred shares (SLIPS) and subordinated debentures no. 4. Bank of Ayudhya, which is the parent bank of AJF, will issue these securities specifically for the fund to bold, and use the proceeds to strengthen its ospital base.
SLIPS are new securities which can be counted as tier 1 capital for banks. They consist of preferred stocks and subordinated debentures, which are "stapled" together as one security. Their yield on investment are then a combination of a normal interest and a dividend. In the case of this new fund, SLIPS will not pay out anything if the Bank of Ayudhya records a loss, and will provide a return of 0-23%/year if has bank has a profit.
Mr. Reungvit said that at the time of low deposit rates at present, this new fund is an alternative to investors' investments. It can provide a stable income in the form of dividends, which are to be paid monthly. At the beginning while the SLIPS portion is not expected to generate any return, the dividends will be derived from interests received from the subordinated debenture no.4. There dividends will be paid at the rate of at least 11%/year of the investment value. Later, if the Bank of Ayudhya has a profit, they can be paid at the rate up to 22.5%/year. Mr. Reungvit noted thet interested investors should carefully study the details of the fund from the prospectus before remtting in the money. The prospectus can be obtained from AJF and branches of the Bank of Ayudhya. End.