Indorama Ventures Public Company Limited (SET: IVL), a global sustainable chemical producer, announced it successfully raised THB 10 billion through an issue of Thai baht-denominated debentures to institutional and high-net-worth investors. The oversubscribed transaction was achieved at lower average spreads than the company’s previous issuance in 2023.
The unsubordinated and unsecured debentures hold an “AA-” rating with a stable outlook from TRIS Rating as of 9 February 2024. They are divided into tranches with maturities of 3, 5, 7, 10,12 years, and 2 years 9 months, offering respective coupon rates of 3.10%, 3.48%, 3.65%, 3.90%, 4.02%, and a discount rate of 3.00%. The spreads are on average 5 basis points lower than the company’s previous issuance in May 2023. Strong interest from investors prompted the company to exercise a greenshoe option to extend the initial issuance size from THB 6 billion to THB 10 billion. The funds will be used to refinance THB 4.18 billion in bonds maturing in 2024, while the remainder will be deployed for general business purposes.
Under its IVL 2.0 evolved business strategy, outlined at the company’s annual Capital Markets Day on 5 March, Indorama Ventures is strengthening its capital structure by deleveraging its business and driving enhanced earnings in a prolonged environment of higher interest rates. To create ample liquidity, the company has committed refinancing of $750 million for 2024 and $400 million for 2025, to be completed in 1H24.
Mr. DK Agarwal, Deputy Group CEO and Group CFO at Indorama Ventures, said, “The robust demand from investors for this issuance is a testament to their confidence in Indorama Ventures’ financial strength and our evolved strategy to drive sustainable long-term growth, which we outlined at our Capital Markets Day this month. We expect the current environment of higher interest rates to continue for the foreseeable future, which is putting pressure on capital costs across the chemicals industry and testing the viability of many companies’ business models. Therefore, to leverage our unmatched global footprint and maintain our industry leadership, we are taking bold steps to strengthen our debt profile, enhance our earnings quality, and generate cash under a policy of strict capital discipline and international standards of leverage.”
Indorama Ventures continues to maintain a diversified approach to securing its liquidity needs, having marked its debut in the Thai debentures market in 2011. In 2015, it expanded internationally with the issuance of SGD-denominated bonds. In 2021, the company issued a THB 10 billion Sustainability-Linked Bond (SLB), a record for Thailand, to fuel its industry leadership in sustainability.
