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A&O advises on the Kingdom of Thailand’s first THB30 bn dual-tranche sustainability bond issuance

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Jaggs Stephen
Stephen Jaggs

Managing Partner


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Prasertsomsuk Doungporn
Doungporn Prasertsomsuk



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17 September 2020

Allen & Overy has acted as Thai and international counsel to Bangkok Bank Public Company Limited, Bank of Ayudhya Public Company Limited and Standard Chartered Bank (Thai) Public Company Limited (the Joint Sustainability Structuring Advisors and Joint Lead Managers) on the Kingdom of Thailand’s THB30 billion dual-tranche sustainability bond issuance. This marks the first issuance of sustainability bonds by the Kingdom of Thailand.

In what is an innovatively structured issuance, the proceeds of each of the two tranches will be used for uniquely different purposes. The first THB10 billion tranche will be used for liability management purposes in connection with Bangkok’s electric Mass Rail Transit Orange Line (East) Project and to refinance capital expenditures of the project, while the second THB20 billion tranche will be used to aid the resolving, remedying and restoring of the economic and social impacts resulting from the Covid-19 pandemic in Thailand. This second tranche has been issued in accordance with the country’s Emergency Decree Authorising the Ministry of Finance to Raise Loans to Solve Problems, to Remedy And Restore the Economy And Society as Affected by the Coronavirus Disease Pandemic, B.E. 2563 (2020), which was recently introduced by the Royal Thai Government.

The bonds are issued under the Kingdom of Thailand’s Sustainable Financing Framework, which forms part of the country’s commitment to the United Nations Sustainable Development Goals and the Paris Agreement under the United Nations Framework Convention on Climate Change. The Asian Development Bank also provided support on the issuance in the form of a technical assistance grant to undertake an external/third party review and assist in certain reporting and monitoring activities in line with global standards and best practices.

Stephen Jaggs, managing partner of A&O’s Bangkok office, commented: “This transaction highlights the Kingdom of Thailand’s commitment in helping to alleviate some of the economic and social challenges brought about by the Covid-19 pandemic, and ensuring as little impact on the domestic market as possible in terms of fundamental yield movements.”

Counsel Doungporn Prasertsomsuk added: “The innovative dual-tranche structure of this issuance, comprising of a new issue and its immediate re-opening, was meant to address the different use of proceeds under different legislations. Of particular note is the added complexity by virtue of the fact that both tranches, despite being under different legal frameworks, were to form a single sizable issue, allowing the Government to raise funds for separate ministries, government departments and agencies for distinctively different purposes.”

The Allen & Overy team involved Bangkok-based counsel Doungporn Prasertsomsuk and Bangkok-based associates Panuwat Chaistaporn and Pradchayada Maneeratanapron, while Singapore-based partner Aloysius Tan and Singapore-based associates provided support on the international aspects of the transaction.

A&O’s involvement in this deal follows our recent role advising state-owned and SET-listed PTT Public Company Limited, Thailand’s fully integrated multinational petroleum and petrochemical company, on its establishment of local and global MTN programmes and the first issuances thereunder, which included the issuance of the first ever 50-year USD-denominated corporate bond in Asia.