DEAL: Thai exchangeable first explained

Author: Ashley Lee | Published: 24 Feb 2014
Exchangeables out of Asia are just as rare
CP Foods' exchangeable bond was the first out of Thailand and the country's first equity-linked product since BTS Group's convertible in January 2011.

Market participants have described exchangeables out of Asia as 'rare beasts.' Deal counsel had to get investors comfortable with not only a product from a new jurisdiction, but also its tense political situation given opposition leaders had promised to start a month of protests to shut down Bangkok from January 13.

Regardless, the deal was highly successful and has become a benchmark for the Thai equity-linked market. Although exchangeables are unusual from Asian issuers, deal counsel were hopeful that this deal would also encourage Thai companies to look to convertibles as bank financing becomes harder to attain.

The country has seen only a handful of equity-linked and even high-yield deals, largely because bank financing has been relatively cheap. But...