Vietnam Joint Stock Commercial Bank for Industry and Trade (Vietinbank) (HoSE: CTG) announced the offering of two batches of bonds to the public and a separate one in 2020. In the first batch, the bank would offer 7 trillion dong, including 3.5 trillion dong of eight-year and 2030 10-year bonds.
The interest rate on bonds was equal to the reference interest rate (average interest rate of individual savings deposits in dong paid after 12-month term) of Vietnam Bank for Agriculture and Rural Development (Agribank), Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank), Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV), VietinBank, plus 0.9 percent per annum with2028 bonds, and one percent per year for 2030 bonds.
Bonds issued were non-convertible, not accompanied by warrants, had no collateral with VietinBank’s assets, and met the conditions to be included in tier-2 capital. The offering price was equal to the par value of 100,000 dong per bond. The implementation time would be in Q2-Q3/2020. The deadline for registration to buy was from June 22 to July 30. The purpose of the issuance was to increase the size of working capital and provide loans to the economy, ensuring the prudential ratios at the request of the State Bank of Vietnam (SBV).
VietinBank would use the money raised in the first phase to supplement medium and long-term loans in four areas, including electricity, gas production and distribution with 3.71 trillion dong; processing and manufacturing industry with 2.17 trillion dong; mining with 670 billion dong and others with 450 billion dong.
In the second round, the bank would offer 3 trillion dong, including the two bond issuances in Q3-Q4, each would value 1.5 trillion dong. The proceeds were also supplemented with a loan capital of 1.62 trillion dong in the electricity production and distribution, 960 billion dong in the industry and manufacturing, 290 billion dong in the mining industry, and the rest in other sectors.
Also, VietinBank offered two separate bond issuances of two other types, each worth 500 billion dong, including two types of bonds. The period of implementation was in June or July. The offering price was equal to the par value of 1 million dong per bond.
The first bond was a 15-year term, with a fixed interest rate of 7.85 percent per annum with the entire 15-year term, payable annually. Bonds were restricted from trading to less than 100 investors. The date of exercising the right to repurchase ten years was from the date of issuance.
The second bond was an eight-year term, floating interest rate equal to the reference interest rate (average of interest rates of individual savings deposits in Vietnam Dong after payment, the 12-month term of Agribank, BIDV, VietinBank, Vietcombank) plus 1.1 percent per year, with the exemption date of three years from the date of issuance.
