Listed businesses and banks plan to mobilize 2.35 billion dollars worth of capital by issuing international bonds this year.
Vincom has announced that it has successfully issued 185 million dollars worth of convertible bonds in Singaporean stock market. The bonds in dollars will become due in five years with the coupon interest rate of 5 percent per annum. The issuer would make payment once every six months.
Prior to that, VIC also successfully found 100 million dollars in capital by issuing convertible bonds in the international market in December 2009.
In 2011, Hoang Anh Gia Lai once stirred up the public with the affair of mobilizing 60 million dollars from international investors through the issuance of 24.3 million GDR on the London Stock Market. After the successful capital mobilization, analysts predicted that more and more Vietnamese businesses would follow the move. However, to date, no other Vietnamese enterprise has succeeded like Hoang Anh Gia Lai Group.
The strict requirements set up by investors on the capability, transparency, which Vietnamese enterprises find it hard to satisfy, are the main reason which has made them shrink back.
Therefore, issuing bonds is still considered the most suitable choice for Vietnamese enterprises which want to seek capital in the international market.
Prior to that, on February 28, MSN Group announced that it has found 235 million dollars in capital from the 4-year convertible bonds worth 155 million dollars for the group, and from the loan worth 80 million dollars for Masan Resource Company. The investors – the US investment funds – would receive the interest on loans of five percent which would then increase by one percent a year for the loans in dollars, and the fixed interest rate of 15 percent for Vietnam dong loan.
The bonds would be convertible at the price of 85,000 dong per share. Meanwhile, Standard Chartered is the bank which provides the 80 million dollar loan to the Nui Phao project. In 2011, MSN was the biggest international capital mobilizer, raising 370 million dollars worth in funds by selling stakes and seeking commercial loans.
PVD, an oil and gas services and drilling company, plans to issue 200 million dollars worth of international bonds with the terms of 5-10 years. The company’s bank debts by the end of 2011 had reached nearly 8 trillion dong, including 1.97 trillion dong in short term loans and 5.92 trillion dong in long term loan. However, PVD has not been put under any pressure, because it has stable cash inflow from the contracts on leasing oil rigs.
An executive of PVD said that the capital to be mobilized from bond issuance would be used to buy a new or an old oil rig.
Big Vietnamese banks, including Vietinbank, Vietrcombank and ACB all have revealed the plans to issue international bonds in 2012. The plan by Vietinbank to issue 500 million dollars worth of bonds was put forward in 2011 which would be implemented in 2012. On March 19, the bank kicked off a series of roadshows in Singapore, Hong Kong, London, Boston, New York, Los Angeles and San Francisco to offer bond sales.
Most recently, the board of directors of VIetcombank said it planned to submit the plan to issue 1 billion dollars worth of bonds in the international market in 2012. Meanwhile, General Director of ACB Ly Xuan Hai said at the bank’s shareholders’ meeting on March 30 that ACB intends to issue 100 million dollars worth of international bonds.
An executive of Vietcombank said that foreign currency trading activities play a very important role in the bank’s operation. The bank’s mobilized capital in foreign currency accounts for 30 percent of the total mobilized capital, while the loans in foreign currencies account for 32.43 percent of the outstanding loans.