Bangkok--1 Jul--HSBC
The Agence Francaise de Developpement (AFD or French Development Agency), a public development-finance institution, announced the successful completion of its second Thai Baht Bond issuance to investors in Thailand. HSBC has been entrusted to act as the Sole Bookrunner and Sole Lead Manager of this transaction.
With the solid credit history of AFD - “AAA” credit rating by Standard & Poor’s and Fitch Ratings, together with its continuous commitment of ongoing projects in Thai financial community, the bonds were well received by various types of institutional investors who are looking for high credit quality papers. The firm order book allowed AFD to launch its bonds at THB 4.0 billion which is the maximum approval limit as permitted by the Ministry of Finance of Thailand.
The bonds were divided into two tranches - 3-year THB 2.2 billion and 7-year THB 1.8 billion bonds. The coupons for the 3-year and 7-year tranches were determined at 3.40 per cent and 4.60 per cent per annum respectively, implying very tight spreads of 72 basis points and 101 basis points over comparable government yields.
The transaction enabled AFD to achieve both desired issue size and target cost of funding, while provided AFD opportunities to expand the investor base in Thai Baht bond markets.
HSBC has been entrusted to act as the Sole Bookrunner and Sole Lead Manager of this transaction after successful arrangement of AFD’s debut Thai Baht Bonds last year.
The success of the transaction demonstrated HSBC concrete relationship with the client and further demonstrate HSBC’s strong franchise in emerging markets and its capacity to manage and execute cross border transactions.
Francois-Xavier Duporge, Country Director , AFD Bangkok said: “It is AFD’s global funding strategy to issue in the Thai bond market in order to diversify our sources of fund and also to actively participate in the development of the local financial markets where AFD has operations. That is why we are so pleased to be the first AAA-rated institution to issue here in Bangkok this year. This return of AFD to the Thai bond market for the second time demonstrates AFD’s strong commitment towards Thailand.”
Mr Willie Tham, Chief Executive Officer, HSBC Thailand said: “HSBC is very honoured to act as the Sole Bookrunner for AFD's two consecutive THB bond issues. We are delighted that, once again, there was overwhelming response from Thai investors amid the challenging market conditions. The success of this second bond issuance reiterates investors' view that AFD is indeed a highly rated world class institution. HSBC is proud to take a leading role in this transaction where proceeds will be reinvested in Thailand for the Kingdom's further economic development."
In Thailand, AFD, together with PROPARCO, its subsidiary dedicated to the financing of the private sector, aims at promoting sustainable economic growth and the protection of three “Global Public Goods”: the fight against climate change; the preservation of biodiversity and the fight against emerging and communicable diseases. AFD also aims at providing support to local governments.
On climate change, AFD jointly developed with Government Housing Bank a program to encourage the construction of more energy efficient buildings. AFD is also working on a partnership with the Bangkok Metropolitan Administration (BMA) to support the implementation of BMA’s Climate Change Action Plan adopted in 2008.
Regarding the protection of biodiversity, the French Global Environment Facility (FFEM), which is represented here by AFD, launched jointly last year with the Thai National Park, Wildlife and Plant Conservation Department and World Wildlife Fund (WWF) the Strengthening Andaman Marine Protected Areas Network Program (SAMPAN). The SAMPAN project is implementing a diverse array of projects which focus on preserving the biodiversity of coral reefs in three marine parks in the Andaman Sea (Surin, Similan and Lanta), while developing sustainable tourism. This operation is funded through a one million Euro grant from FFEM, part of which has already been disbursed.”
Media enquiries to :
AFD HSBC
France
Philippe Laroche Tel.+331-4070-2757
Thailand
Francois-Xavier Duporge Tel: +662-663-6080 Thailand
Prakob Phiencharoen Tel: +662-614-4869
Savittree Muadmuang Tel: +662-614-4606
Hong Kong
Annie Cheng Tel: +852-2822-4938
Maggie Cheung Tel: +852-2822-4821
Notes to editors:
1. AFD in Thailand
AFD signed an Establishment Agreement with Thailand International Development Cooperation Agency (TICA) on February 18th, 2006, which officially authorized AFD to operate in Thailand.
AFD is a public development-finance institution that has worked to fight poverty and support economic growth in developing countries and the French Overseas Communities for more than 60 years. AFD executes the French government’s development aid policies. AFD is active in over 50 countries and finances and supports projects that improve people’s living conditions, promote economic growth and protect the planet. AFD-funded projects provide schooling for children, support farmers and small businesses, supply drinking water, preserve tropical forests and fight climate change, among other things. AFD committed nearly ?4.5 billion to financing aid activities in developing countries and the French Overseas Communities in 2008, i.e; a 25% increase on the previous year.
2. HSBC in Thailand
HSBC was established as the first commercial bank in Thailand in 1888. With access to global expertise and enriched local knowledge, HSBC in Thailand provides a full range of financial services including corporate, commercial and institutional banking, global markets, securities services, trade and supply chain, payment and cash management services to corporate customers; personal financial services and credit cards to a growing retail customer base in Thailand. HSBC is globally recognised for its high service standards, ethical practices and full commitment to corporate social responsibilities to benefit the local economy.