Bangkok Dusit funds growth with $331m CB

Bangkok Dusit Medical Services, Thailand’s biggest private hospital operator, raised Bt10 billion ($331 million) through a zero-coupon convertible bond on Wednesday evening.

The deal is denominated in Thai baht but settled in US dollars. It has a five-year maturity with a three-year investor put and an issuer call at two-and-a-half years. It offers a 2% yield and converts at a 15% premium to Wednesday’s closing price of Bt18.3.

The amount Bangkok Dusit is raising through this transaction is roughly equal to the group’s planned yearly capital expenditure for 2014 and 2015, as it continues an aggressive expansion strategy. The group plans to grow its network to 50 hospitals, up from 31 today.

Indeed, it agreed the latest acquisition at the end of August: a Bt3.6 billion deal to buy the 151-bed Siriroj Hospital in Phuket.

Issuing a CB to international investors will help it to fund such acquisitions at half the cost of its existing baht-denominated debt.