Thai zero-coupon first explained

Author: Ashley Lee | Published: 9 Oct 2014

Bangkok Dusit Medical Service’s (BDMS) zero-coupon convertible bond has marked a number of firsts in the Thai market. It also clarified local regulations for Thai companies issuing internationally-sold convertible bonds.

The private hospital operator’s THB 10 billion ($311 million) offering, which closed on September 18, was the first-ever zero-coupon convertible bond in the Thai market. To account for currency risk, it was denominated in baht but settled in US dollars.

Deal counsel had to work closely with local regulators, who were unfamiliar with the product.

In Thailand the vast majority of bonds are plain vanilla, according to Veeranuch Thammavaranucupt, partner at Weerawong Chinnavat & Peangpanor, who advised the issuer on Thai law matters. "It’s very rare that there are convertible bonds, especially those in line with...