TMB Bank of Thailand returned to the offshore bond market after an absence of about eight years as it tapped the CNH market for CNH600 million, taking advantage of the attractive cross-currency swap. The transaction, priced on March 2, is the first ever CNH benchmark bond issue from Thailand and the first offshore bond offering from a Thai issuer in 2015.

The Reg S three-year issue was priced at par with a similar coupon and re-offer yield of 5.50%. The deal, drawn from the bank’s US$3 billion euro medium-term note programme, is issued out of TMB’s Cayman Islands branch with the proceeds planned for general corporate purposes, including meeting its funding requirements.

TMB CFO Thanomsak Chotikaprakai was pleased with the success of this landmark transaction, which received strong support from international investors. The offering garnered an order book of CNH900 million from 48 accounts with 99% of the bonds allocated in Asia and 1% in Europe. By type of investors, fund and asset managers accounted for 62% of the paper, private banks 25% and banks 13%.

TMB has communicated to the market that it only wanted a small benchmark of CNH500 million, but eventually upsized the deal amount to CNH600 million to satisfy investor demand.

“TMB is a solid company with a good financial position,” a banker familiar with the deal points out. “They have other funding channels, which is why they were absent from the offshore debt capital markets for such a long period of time. They’ve been opportunistic as the cross-currency swap in the CNH market has been trending up for a while now. It’s on a very elevated level, especially on the short term – which is three years.”

In tapping the CNH market, TMB considers it strategic as a funding source. “They want to establish a name in the Asian debt market as they’ve been issuing mostly in Thai baht,” the banker explains. “And with the CNH market relatively quiet due to lack of issuance, they’ve decided to tap into the investors’ pent-up demand.”

As a reference point, investors didn’t look at the secondary market performance due to thin supply so far this year. Instead, they looked at where the CNH certificates of deposits were printing. For instance, the A-rated Chinese banks were raising three-year money at 4.7%

HSBC was the sole global coordinator for the deal, as well as a joint bookrunner, along with ING.

TMB, owned 26% by the Thai ministry of finance, is the country’s sixth largest commercial bank with consolidated assets of 810 billion baht