It looks like things are looking up for CPPKY. The CP Group has gotten their debt refinance for their Indonesian operations and debentures for the CP Group were "oversubscribed" before the expiration period. As always, it is a bit tricky figuring out how much the ADR shares will benefit from this but it seems to indicate that the CP Group is regaining strength which would seem to be good for those of us who still have CPPKY ADRs. What do you think? Here's the details:
Thai corporates bank on bonds for funds, NATION
( The Nation (Thailand) )
SASITHORN ONGDEE and SARAWOOTh JIRAPISANKUL; 10-26-1999
ADDING to the Bt28.6 billion worth of baht bonds already issued by Thai firms this year are a raft of new debentures to refinance short-term loans amid current low interest rates, according to investment bankers.
Companies are also seeking new funds to use as working capital because banks are still reluctant to approve new loans. Issuance of new bonds in the domestic market is a good alternative to boost cash flow.
Siam Cement Plc (SCC) was the first large corporation to issue baht bonds early this year.
SCC has issued Bt38 billion in bonds so far, and is in the process of issuing another Bt12 billion.
Surapong Heng, first vice-president of corporate finance at Jardine Fleming Thanakom Securities Co Ltd, said the current low interest rate was making today the best time for local companies to issue debentures.
He said most local corporates which had issued bonds have been making repayments on their US dollar-denominated debts recently to prevent any foreign exchange risk in the future.
There are also Thai companies which decided to issue bonds to repay debts owed to local financial institutions to reduce their interest expenses,
he added.
The newly-issued bonds carry a yield of between 8 per cent and 9.25 per cent, compared to the current minimum lending rate (MLR) of about 8.75 per cent-10.25 per cent. Such a low interest rate on bonds makes it attractive
for issuers to launch new debentures, while there is also demand from long-term
investors who want to put their investment money in the place where the
return will be higher than the deposit rate.
According to a bond dealer, the economy has been showing signs of
recovery, and the previously high interest rates have been coming down.
'The downward trend of interest rates will continue until next year. There is high liquidity in the market, and people have been discouraged to put their money in banks due to low deposit rates. It's just a convenient
time for companies to issue bonds,' he said.
At present, the yield of the bonds is higher than deposit rate of commercial banks, but there is no guarantee how long will the deposit rate will stay at the low level.
The amount of bonds to be issued by the government will also be lower, causing long-term investors to seek out new products.
According to Thai Bond Dealing Centre, the total trading value of the Thai bond market between Oct 1-21 stood at Bt29.58 billion. Bonds worth Bt28.64 billion were traded by cash and Bt934.86 million by financing.
An investment banker from KGI Securities One Plc commented that the debentures had been launched only by large corporates. These bonds have low investment risk while they are also giving attractive yield when compared
to the government bonds.
'Investors are willing to take higher risk for a higher return, so they are turning to invest more directly with the Thai companies,' he said.
For example, a press release from Bangkok Bank said the Bt5 billion worth of debentures issued by the Charoen Pokphand Group has been oversubscribed within three days. Therefore, the bank has announced it was cancelling
the subscribing period, which initially had been scheduled to last 10 days.
The KGI Securities One banker said he believed that more medium-size companies would join in the issuing of new debentures next year. However, future demand for bonds will be indicated by the progress of debt restructuring efforts by some companies which had earlier defaulted on their bonds.
He said commercial banks would try to advise their customers to issue new bonds to support their companies' working capital, rather than just to seek new loans from banks.
Aviruth Wongbuddhapitak, vice-president of Siam Cement, said his firm would think about more bond issues some time next March.
'We have no intention of seeking immediate approval for more bonds, but would consider it right before the shareholders meeting next year. But it will depend on market conditions.'
WORLDSOURCES ONLINE, INC., A JOINT VENTURE OF FDCH, INC. AND WORLD TIMES,INC. NO PORTION OF MATERIALS CONTAINED HEREIN MAY BE USED IN ANY MEDIA WITHOUT ATTRIBUTION TO WORLDSOURCES ONLINE, INC.
COPYRIGHT ¸ 1999 BY WORLDSOURCES ONLINE, INC.
SASITHORN ONGDEE and SARAWOOTh JIRAPISANKUL, Thai corporates bank on bonds for funds, NATION. , The Nation (Thailand), 10-26-1999.
INDONESIA'S CHAROEN POKPHAND COMPLETES DEBT RESTRUCTURING
( Asia Pulse )
JAKARTA, Oct 27 Asia Pulse - PT Charoen Pokphand Indonesia (CPI), a subsidiary of Thailand's Pokphand Group, has reached an agreement with its bankers on rescheduling some $US190 million in loans, the company said in a statement.
CPI, a leading manufacturer of poultry feed, signed an agreement with 26 creditors in Singapore under which its loans and those to an affiliated unit, chicken breeder PT Charoen Pokphand Jaya Farm (CPJF), will be repaid by 2003, the company said.
Under the agreement, interest will be 2.5 percentage points above the Singapore interbank offered rate (SIBOR).
In negotiations with CPI, the lenders on the creditors' steering committee were Bank Brussels Lambert, Citibank NA and American Express Bank. The creditors include banks from Japan, Europe and the US.
(ANTARA)
27-10 1350
BNI SECURITIES - DAILY MARKET REPORT - OCT 27, 1999
( Asia Pulse )
(Following is the full text of a statement released by BNI
Securities Daily Research. Contact details below.)
CORPORATE NEWS
* Charoen Pokphand (CPIN) reached a commitment with its creditors to reschedule the payment of its Sin$ 190 mn debt. Previously, two companies under Charoen Pokphand group completed agreements with their creditors to restructurize their debts i.e. Surya Hidup Satwa for its Sin$ 32mn and CP Prima for its Sin 131.5 mn. (HP) * PT Tirta Mahakam Plywood will go public with the following
tentative schedule : Total shares : 50 mn Nominal price : Rp
500 Offering price : Rp 800 - RP 900 per share Offering period : November 22 - 25, 1999
This document is not intended to be an offer, or a solicitation of an offer, to buy or sell relevant securities (i.e. securities mentioned herein or of the same issuer and options, warrants or rights to or interest in any such securities).
The information and opinions contained in this document have been compiled from or arrived at in good faith from sources believed to be reliable. No representation or warranty, expressed or implied, is made by BNI SECURITIES or any other member of the BNI Group, including any other member of the BNI Group from whom this document may be received, as to the accuracy or completeness of the information contained herein.
All opinions and estimates in this report constitute our judgement as of this date and are subject to change without notice.
BNI SECURITIES RESEARCH,
Tel (62-21) 570 1205,
Fax (62-21) 570 2591
e-mail : bnisecbloomberg.net,
indoexchange.com
ASIA PULSE
27-10 1613
Retransmission, dissemination or publication, whether in print,electronic or other means, is expressly forbidden without written authorization from Asia Pulse. Asia Pulse is not in the business of providing professional advice and the Asia Pulse service should not be relied on as a substitute for financial, legal or other professional advice. Asia Pulse gives no warranty or guarantee as to the accuracy of information contained in the Asia Pulse
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¸ 1999 by Asia Pulse Pte Ltd
Author not available, BNI SECURITIES - DAILY MARKET REPORT - OCT 27, 1999. , Asia Pulse, 10-27-1999. |
