Sunday, August 10, 2008

THAI issue on hold

FINANCE :Thai Airways International has postponed a planned bond issue worth up to nine billion baht this month after a ratings downgrade, a company executive and fund managers said yesterday.

The national carrier had been scheduled to sell bonds this month, but held back after Tris Rating downgraded its company and debenture ratings late last month, citing a weakening financial profile after soaring fuel prices.

An airline executive, who asked not to be named, confirmed the delay, adding THAI might try again later this year. "We still want to issue the bonds to replace the issue that will mature soon. The sale should resume later this year," the executive said, referring to the 5.5 billion baht due to mature in October.

THAI had planned to sell the unsecured bonds in three tranches, with maturities of five, seven and 10 years. The underwriters included Bank of Ayudhya, TMB Bank, Tisco Securities and BT Securities.

THAI shares closed yesterday on the Stock Exchange of Thailand at 16.30 baht, down 50 satang, in trade worth 36.37 million baht.


Thanachart fined

BROKERAGES :Thanachart Securities was fined 1.69 million baht for violating compensation rules for marketing officers.

The Stock Exchange of Thailand said Thanachart was found to have paid excess compensation to branch office managers, credited marketing officers for customers whose accounts they did not service and violated internet trading commission rules.

One former branch manager, two branch office managers and four marketing managers were ordered suspended. Five executives and one other branch manager were reprimanded.


KTC bond issue

FINANCE :Krungthai Card Plc, the country's largest credit card issuer, will issue between 2.5 billion and three billion baht in bonds next week to refinance debt and for working capital, fund managers said yesterday.

The bonds, rated A- by Tris Rating, would have a maturity of 1.5 years with a coupon of 4.89% and be offered to institutional investors next week, the fund managers said.

Benchmark 1.5-year government bonds were yielding 4.00% in the secondary market yesterday. BT Securities is the issue's underwriter.

KTC, 49% owned by Krung Thai Bank, plans to issue 12 billion baht worth of bonds by year-end to refinance debt and expand loans.

KTC shares closed yesterday on the SET at 20 baht, down 30 satang, in trade worth 155,000 baht.


NVL rated BBB-

FINANCE :Tris Rating yesterday affirmed the company rating of Nava Leasing Plc (NVL) at BBB- with a negative outlook.

Tris said the rating reflected NVL's high average funding costs compared with rivals and credit risk exposure from its new higher-risk auto refinancing loans, a form of secured personal loans. In addition, the unfavourable operating environment might erode asset quality and limit future portfolio expansion. However, these concerns are partially mitigated by an adequate capital base and growing demand for consumer loans.

The negative outlook is based on concerns over asset quality after the shift to refinancing loans. Although relatively higher yields can alleviate higher average funding costs, the increase in yields may not be sufficient to cover the possibility of higher provisions from weakening loan quality.

NVL shares closed yesterday on the SET at 0.47 baht, down one satang, in trade worth 591,000 baht.


28-day yield 3.38%

DEBT MARKET :The Bank of Thailand yesterday sold two billion baht worth of 28-day bills for an average yield of 3.384% and a bid coverage ratio of 5.94 times. Also sold were five billion baht in 91-day bills for an average yield of 3.4692% with bid coverage of 2.9 times, and five billion baht in 182-day bills for an average yield of 3.52308% with bid coverage ratio 2.64 times.


Reserves off $1bn

FINANCIAL DATA :International reserves totalled $104.1 billion as of Aug 1, compared with $105.1 billion the week before, the Bank of Thailand said yesterday. The net forward position was $17.1 billion, compared with $16.6 billion the week before. Net claims on government were 114.5 billion baht, compared with 105.8 billion. Net policy credits were -1,938.4 billion baht, compared with -2,000.7 billion. Reserve money was 909.7 billion baht, compared with 867.7 billion.

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