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Differences in Bond Offerings to Different Investor Types
2 MIN READ
In Thailand, there are specific regulations governing the issuance of bonds, which vary depending on the type of investor to whom the bonds are offered. Here’s a breakdown of the different investor categories and the corresponding regulations:
1. Specific Investors (PP-10):
- Bonds are offered to a maximum of 10 institutions or individuals.
- No underwriter is required.
- Investors are typically internal to the company, such as institutional investors, audit committees, executives, major shareholders (holding more than 10%), and subsidiaries.
- If offered to institutional investors, there are no limits on the offering amount, but if offered to related parties, the limit is 50 million baht per offering.
- Given the limited and select group of investors, credit ratings are often not required, as investors are assumed to have sufficient knowledge of the company.
- The company must report significant events that could impact investor perceptions.
- Similar to PP-10, no underwriter or credit rating is required.
- Investors are assumed to have access to sufficient information to make informed decisions.
- The company must report significant events and submit financial statements for review by institutional investors.
3. High-Net-Worth Individuals (HNW):
- More regulatory oversight is required compared to PP-10 and II due to the broader range of investors.
- An underwriter is necessary, and the issuer must have a representative.
- The offering must be filed with the Securities and Exchange Commission (SEC) for approval.
- Similar to II, the issuer must submit financial statements and reports for significant events.
4. Public Offering (PO):
- This is the most regulated type of bond offering.
- An underwriter is required, and a registration statement must be filed with the SEC.
- A credit rating is mandatory to assess the investment risk.
- The issuer must submit annual reports, financial statements, and reports for significant events.
5. Rights Offering/Pre-emptive Rights Offering (RO/PPO):
- This applies specifically to convertible bonds.
- The issuer can offer convertible bonds to existing shareholders without a credit rating, assuming shareholders have sufficient knowledge of the company.
- An underwriter is not required, but the issuer must report significant events.
- Subscription rights are based on the existing shareholding structure.
IAS Analyst
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