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Banking & Finance

Vietcombank's $352.9mn bond issue approved

Released at: 20:00, 12/04/2017

Vietcombank's $352.9mn bond issue approved

Photo: Duc Anh

SBV gives go-ahead to bond issuance this year.

by Van Hai

The State Bank of Vietnam (SBV) has given approval to a bond issuance by the Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) this year, with a maximum value of VND8 trillion ($352.9 million).

The interest rate will be decided by Vietcombank in accordance with market rates and SBV regulations. Eligible buyers are Vietnamese and foreign organizations and individuals, excluding credit institutions and their subsidiaries and branches of foreign banks.

The plan includes a buy-back option. The SBV requires Vietcombank redeem its bonds and ensure that it complies with capital adequacy ratio (CAR) requirements. In the event the bonds are included in Tier 2 capital, any repurchase must comply with regulations.

Vietcombank also gained approval from the SBV last year to issue bonds with a maximum par value of VND8 trillion ($352.9 million). The issuance was successful, according to a report presented at the Business Review Conference, and included VND6 trillion ($264.7 million) in Tier 2 capital.

Of the VND8 trillion ($352.9 million) issued, convertible bonds with no asset-backed guarantees with a face value of VND2 trillion ($88.2 million) and a ten-year tenure were sold to the public. The interest rate was calculated as the reference interest rate plus 1 per cent, or 7.57 per cent per annum in the first year.

Vietcombank is one of the four largest joint stock commercial banks in Vietnam and was equitized in 2008. On June 30, 2009, its shares were officially listed on the Ho Chi Minh Stock Exchange (HoSE). Its market capitalization now stands at nearly VND133 trillion ($5.9 billion) and it is in the Top 10 largest caps on HoSE.

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