Allen & Overy advises on the first issuance of bonds under Thailand’s new Digital Infrastructure web portal sandbox initiative

These transactions represent the first bonds issued by way of a new Digital Infrastructure (DIF) web portal, an initiative established by the Securities and Exchange Commission of Thailand under a sandbox programme to support the digital transformation of the Thai capital markets.

The DIF web portal sandbox initiative aims to enhance the efficiency, transparency, security and accessibility to the capital markets by all market participants, especially investors, and elevate the market to one that is digital in stature. The initiative supports various transactions, from filing approvals, through to submitting reports after an issuance/sale is completed. Issuers and investors from any group have equal access to the market, while operators using the system are able to reduce operational costs. It also enables market regulators to facilitate more efficient supervision.

PTT is Thailand’s leading integrated oil and gas conglomerate and Fortune Global 500 member, while PTTEP TC is a wholly owned subsidiary of PTT Exploration and Production Public Company Limited (PTTEP), Thailand’s national petroleum exploration and production company, which in turn is majority owned by parent PTT.

PTT’s THB1bn issuance comprises 2-year unsubordinated and unsecured bonds and carry a coupon rate of 2.31% p.a. The bonds have been rated "AAA(tha)" by Fitch Ratings.

PTTEP TC’s THB1.5bn issuance, meanwhile, comprises 3-year senior guaranteed bonds and carry a coupon rate of 2.51% p.a. The bonds are fully guaranteed by PTTEP and have been rated "AAA" by TRIS Rating, which operates as a strategic partner in Thailand of S&P Global. 

With respect to the PTT issuance, Anchalee Limviriyalers (counsel) commented: "We are delighted to have advised long-standing and valued client PTT on this prominent mandate, which will enhance efficiency and contribute to the further digitalisation of the Thai capital markets."

Commenting on the separate PTTEP TC issuance, Doungporn Prasertsomsuk (counsel) stated: "Digital bonds are attracting growing interest regionally from issuers and investors alike. PTTEP TC’s transaction by way of the DIF web portal sets a market precedent for other similar future transactions in Thailand."

Our team’s involvement in these latest deals follows our significant role in 2021 in which we advised PTT on the upsize of its existing medium-term note (MTN) programme to THB130bn and the drawdown of five tranches of THB-dominated bonds worth THB47bn under this existing programme. This notably included the issuance of THB-denominated Thai Overnight Repurchase Rate (THOR)-linked floating rate bonds in what marked the first ever THOR-linked floating rate bond issuance by a Thailand-based corporate. We additionally advised PTT in 2020 and 2022 on its establishment of local and global MTN programmes and the issuances thereunder, which included the issuance of the first ever 50-year USD-denominated corporate bond in the Asia-Pacific region.

Our team also in 2021 advised PTTEP on the establishment of its MTN programme and public offering of digital bonds under that programme to the value of THB6bn. This prior issuance marked the first fully-digitalised corporate bond offering via a digital wallet in Thailand (i.e. the 'Pao Tang' mobile application) and Asia more broadly, and paved the way for future issuances of digital corporate bonds in the Thai market. This prior issuance also marked the first time in the region that a corporate bond offered in the primary market had the ability to be traded anywhere and at any time into cash in the secondary market via a digital wallet that is supported by twenty-four hours a day, seven days a week real-time trading functionality.

The A&O team for the PTT transaction was led by Suparerk Auychai (managing partner), with substantial support from Anchalee Limviriyalers (counsel), Natthicha Wiriyatornphan (associate) and Pichaya Ruamsub (associate).

The A&O team for the separate PTTEP TC transaction was led by Doungporn Prasertsomsuk (counsel), with substantial support from Pradchayada Maneeratanapron (associate).