Laotian power producer EDL-Gen has raised Bt6.5bn (US$198m) from the sale of a dual-tranche issue that marks the first offshore bond for the government-owned company.
The deal is also the first corporate bond for a Laotian company in Thailand. The success of the deal will help Thailand's bid to become a major regional funding centre.
EDL-Gen priced a Bt1.5bn five-year tranche to yield 4.95%, a Bt2bn seven-year at 5.20% and a Bt3bn 10-year at 5.4%. The deal was almost 2x oversubscribed, thanks to the rich spreads of around 245bp-255bp.
The bond was rated BBB+ from Tris, allowing more institutional investors to participate, unlike the unrated Laos' sovereign bonds, which were sold mainly to high-net-worth investors.
The rating also made it possible for EDL-Gen to price inside the sovereign, which had sold a five-year to yield 5.2% and a seven-year to yield 5.5% in October.
Bank of Ayudhya, Standard Chartered and TMB Bank were joint bookrunners for the deal, which will settle today.
EDL-Gen is likely to return to Thailand's debt markets as it has a remaining balance of Bt3.5bn that has been approved by the Thai government for issuance.
Proceeds from the bonds will be used to acquire nine hydropower projects from parent Electricite du Laos, which is also the country's sole state-owned electricity offtaker. EDL holds a 75% stake in the issuer and is expected to retain majority control. Offtake agreements with EDL are a boon to the power plants, giving them a stable and predictable revenue flow.
Twin Pine Consulting is financial adviser to EDL-Gen.