After Vietnam Prosperity Joint-Stock Commercial Bank (VPBank) and Tien Phong Commercial Joint Stock Bank (TPBank), the Board of directors of Saigon Hanoi Commercial Joint Stock Bank (SHB) wants to offer foreign bonds and list bonds at foreign stock exchanges.
Currently, the bank’s Board of directors is seeking shareholders’ opinions in writing. The number of bonds to be issued and the time of issuance has not been given by SHB. According to the announcement, the closing date of the list of shareholders to obtain written opinions is August 15, 2019. Expected implementation time is August 2019.
Thus, after VPBank and TPBank, SHB in turn mobilise foreign capital.
In mid-July 2019, VPBank successfully mobilised $300 million (over 7.1 trillion dong) through the issuance of three-year international bond.
VPBank’s bond have a nominal interest rate of 6.25 percent, which is non-convertible, unsecured and listed on the Singapore Stock Exchange. These bonds are distributed to Asian and European investors, with 52 percent and 48 percent respectively.
According to VPBank’s representative, the issuance had just been the largest international bond issued for the first time by a Vietnamese private enterprise on the international market. Investors registered to buy with a total of three times the amount of VPBank bond issued.
That issuance was also the first capital mobilisation in the Eurobond Medium Term Note (EMTN) of VPBank in the next 12 months, with a maximum value of $1 billion.
After VPBank, at the end of June 2019, Tien Phong Bank (TPBank) also consulted shareholders, preparing to issue $200 million of international bond.
Many experts predicted that in the near future, more banks would issue international bond to raise Tier two capital.
According to Can Van Luc, economic expert, there were currently many favourable conditions for banks to issue international bond. Firstly, the government is encouraging the development of corporate bond market. Secondly, Vietnam’s credit rating has been raised by Fitch and S&P in April and May 2019. Therefore, the deposit interest rate of foreign currency will be lower (because the risk is assessed at a lower level).
