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Published on April 22, 2008

Siriporn Chanjindamanee

The Nation

Two leading companies Advanced Info Service (AIS) and Ch Karnchang (CK) are issuing debentures totalling Bt6 billion, and wooing retail investors with relatively high returns.

AIS will issue 5-year unsecured corporate bonds worth Bt4 billion.

The bonds will carry a return of 4 per cent a year for the first two years and 4.9 per cent for the remaining three years.

CK will offer 3-year unsubordinated and unsecured debentures worth Bt2 billion.

They will carry a 5-per-cent yield annually.

The debentures provide "interesting" conditions such as attractive returns, a good investment opportunity and low risks, the issuers say.

The returns will be higher than the current meagre deposit rates at banks.

The bonds are probably more stable than shares with the stock market seeing wide price swings frequently. Big banks now quote their 12-month deposit interest rate at below 2.5 per cent per year.

Holders of any of the bonds would obtain returns on a quarterly basis, enabling them to either spend the money or reinvest it in other instruments.

The issue also offers retail investors the chance to be debenture holders as private companies seldom issue bonds to individuals.

The last time CK issued such debentures was in June last year.

AIS issued its corporate bonds to retail investors for the second time after the first issuance of Bt8 billion in 2000, which was fully subscribed to in 15 minutes.

AIS chief executive officer Vikrom Sripratakh said the company wanted investors to have a chance to earn relatively high interest rates and believed it would draw a positive response.

"We want to strengthen our relationship with our customers and it is the company's policy to build up a balance of institutional and retail investors as joint stakeholders," he said. The bonds are easily accessible as individuals need only spend Bt100,000 for the two debentures, which is cheaper than the Bills of Exchange issued by commercial banks.

In addition, it is another investment channel for those who want to diversify their portfolio.

Investors averse to high risk may park their money in debentures to avoid the turmoil in the global market.

Risk-averse persons may also take some comfort in knowing that the chances of a default is rather limited.

Thai Rating and Information Services (TRIS) rates AIS bonds AA while giving CK debentures a BBB+ rating.

Vikrom expects his company's income this year would continue to rise with a not lower than 50-per-cent revenue sharing ratio due to expectations of a 20-per-cent growth of the non-voice service in the industry.

CK is relatively liquid with the redemption from various channels including investment returns and dividends, according to an officer of the company.

AIS will spend its Bt4 billion on network expansion to improve the quality of its services.

CK will spend Bt2 billion on business and investment expansion and on debt repayment.

People interested in subscribing to the CK bonds should contact Bank of Ayudhya branches between Thursday and April 29.

AIS bonds may be subscribed to at Kasikornbank and Siam Commercial Bank branches.