Ananda Development PCL becomes the first property development company to issue equity treated instruments hybrid securities with a value of 1 billion Baht

Friday 07 August 2015 13:31
Ananda Development Public Company Limited, one of the leading condominium developers and the leader in mass transit condominiums plans to issue equity treated instruments No. 1/2018 with a total issuing amount of 1,000 million Baht and minimum buying amount 100,000 Baht. To be offered to institutional investors and high net worth investors between 14 and 18 August 2015. Krungthai Bank Public Company Limited is the underwriter. The Company will use the proceeds from the issuance of the Debentures as working capital for the business. TRIS Ratings gives a credit rating for the issuance of “BB” with positive outlook.

Mr Chanond Ruangkritya, President and CEO of Ananda Development Pcl, said "I am very pleased to be able to announce yet another Ananda innovation. This time it is the optimization of our capital structure by being the first Thai real estate developer to issue a perpetual security. One of the key differentiators of this new form of financial instrument is that it is treated as equity but it’s better for existing shareholders than a capital increase as there’s no share dilution and no Earnings Per Share dilution, although our Return on Equity will temporarily look lower until the earnings from the projects in which we invest the proceeds come through, just like any equity increase, and then will receive a boost when the instrument is retired, which doesn’t happen with normal capital increases.”

He added, “The successful issue of this instrument means our Debt/Equity Ratio will be decreased, reflecting a lowering of the overall risk profile of the company and this new capital and more optimized balance sheet will support and increase Ananda’s growth.“

The Subordinated Perpetual Debentures from Ananda Development Public Company Limited No. 1/2018 has the following features:

· Interest rate is quarterly paid. An issuer has the right to defer interest payments with accumulating interest amount to be paid later.

· Years 1 to 5, fixed rate at 9% per annum (government bond yield 5 year plus initial credit spread of 6.63% per annum)

· Years 6 to 25, government bond yield plus initial credit spread of 6.63% per annum plus 0.25% per annum

· Years 26 to 50, government bond yield plus initial credit spread of 6.63% per annum plus 1.0% per annum

· Years 51 onward, government bond yield plus initial credit spread of 6.63% per annum plus 1.5% per annum

· Interest rate can be changed every five years with reference to government 5 year bond yield 2 days before the change.

For more information, please contact Krungthai Bank Plc. 0-2208 – 7342 to 49, 0-2208 – 3071 to 75