Following strong demand from foreign banks, Thai Military Bank exercised its greenshoe option on the dual-tranche $80 million three-year loan last week, thereby increasing it to $100 million. Eight of the nine banks that joined arrangers ABN AMRO in the transaction were foreign banks. Krung Thai Bank's Singapore branch was the only Thai bank participating in the transaction, which was signed last week.
Although being aggressively priced and having a relatively longer tenor than those seen from banks coming to the market after a long time, the deal's success demonstrates the confidence in Thai Military Bank and the scarcity value associated with it. Proceeds from the loan will be utilized for general corporate purposes.
The final allocations are as follows:
Thai Military Bank $100 million three-year loan | Tranche A | Tranche B | Total |
Arranger |
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ABN AMRO Bank N.V. | 6,000,000 | 9,000,000 | 15,000,000 |
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Co-Arrangers |
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Banca Nazionale del Lavoro S.p.A., Singapore Branch | 6,000,000 | 9,000,000 | 15,000,000 |
BLB Asia Pacific Ltd | 6,000,000 | 9,000,000 | 15,000,000 |
LB Kiel | 4,800,000 | 7,200,000 | 12,000,000 |
Natexis Banques Populaires, Singapore Branch | 4,000,000 | 6,000,000 | 10,000,000 |
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Senior Managers |
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Chinatrust Commercial Bank, Offshore Banking Branch | 4,000,000 | 6,000,000 | 10,000,000 |
Wachovia Bank, National Association | 4,000,000 | 6,000,000 | 10,000,000 |
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Managers |
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Baden-Wnrttembergische Bank AG, Hong Kong Branch | 2,000,000 | 3,000,000 | 5,000,000 |
United World Chinese Commercial Bank | 2,000,000 | 3,000,000 | 5,000,000 |
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Co-Manager |
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Krung Thai Bank Public Company Limited, Singapore Branch | 1,200,000 | 1,800,000 | 3,000,000 |
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Total | 40,000,000 | 60,000,000 | 100,000,000 |
The bank posted a net profit of Bt247 million for the quarter ended June 2002. This represents a 30% drop on the previous quarter but a 62% increase year-on-year. For the six months ended June 2002, the bank's net profit amounted to Bt601 million, a 203% rise over the same period in 2001. However, operating expenses in the second half of the year are likely to increase significantly as the bank is expected to begin implementing an early retirement scheme in the third quarter of 2002, according to a research report by Seamico Securities.
The bank is also aiming to reduce its investments and has announced recently that it will sell its 10% stake in CGU Life Assurance (Thai) Co. Ltd. The bank signed a sale and purchase agreement with Suwannalak Co., Cardif S.A. and Siam Charoen Capital Services Co. The sale is likely to be concluded by the end of the month.
