Anyone who has followed the recent political strife in Thailand could be forgiven for thinking its capital markets would go quiet for a while. After all, the ousting by military coup of Prime Minister Thaksin Shinawatra was hardly an insignificant event.

Perception, however, is a strange business. People outside Thailand, watching events unfold on the television, view the situation as a crisis. Ordinary Thais, meanwhile, are not so unfamiliar with military coups and everyday activities have continued as normal.

The business as usual' attitude prevails in the ABS market, with two transactions in the works. Dhanarak Asset Development last week priced the second issue from its THB24 billion ($638.2 million) program, with proceeds funding construction of a new government office complex in Bangkok. Payment of principal and interest on the deal is dependent on future rental income.

Meanwhile, proposals have been submitted for the THB6 billion joint offering by the Ministry of Energy and Petroleum Authority of Thailand (PTT), which will be used to finance the building of a new office housing both agencies.

State-agency Dhanarak sold TB8.2 billion - upsized from THB6.2 billion - of 14-year and 19-year bonds, rated triple-A by Fitch Ratings. Bangkok Bank, Government Savings Bank, Thai Military Bank and HSBC acted as joint underwriters, reprising their role on Dhanarak's THB10.3 billion debut in November 2005 (ASR, 12/5/05).

According to a banker involved on the deal, the 14-year paper settled at 6.05%, roughly in the middle of the indicative pricing range of range of 5.8% to 6.15%. Fourteen-year government bonds were trading at 5.27% as of press time. The 19-year paper priced at 6.5%, having been marketed at 6.15% to 6.65%. There is no equivalent government bond.

The source said all parties were extremely satisfied with the result. "This was a popular deal, over 1.9 times oversubscribed with interest coming largely from local insurance companies," he said. "Given the events of the past couple weeks, we are really excited to have been able to complete the transaction at this time."

(c) 2006 Asset Securitization Report and SourceMedia, Inc. All Rights Reserved.

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