VietinBank successfully issued VND 7,000 billion of bonds to the public

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VietinBank announced the successful issuance of 70 million bonds to the public, equivalent to the par value of VND 7,000 billion. This includes 35 million 8-year bonds and 35 million 10-year bonds.

Vietnam Joint Stock Commercial Bank for Industry and Trade (VietinBank) has just announced the results of the first public offering of bonds from 2020 to June 22-30.

Accordingly, the bank issued 70 million bonds, mobilizing VND 7,000 billion. This includes 35 million 8-year bonds maturing in 2028 and 35 million 10-year bonds maturing in 2030.

This type of bonds is non-convertible, not accompanied by warrants, does not guarantee the bank’s assets, is issued and paid in VND, establishes direct debt repayment obligations and satisfies the conditions to be included in Tier II capital of the bank.

The bonds are paid interest once a year with variable interest rates. 2028 bonds have interest rates equal to the reference interest rate plus 0.9% per annum. Bonds of 2030 have interest rates equal to the reference interest rate plus 1% / year.

The majority of bonds are bought by individual investors. Specifically, individual investors bought 45.7 million bonds for both 8-year and 10-year bonds, the remaining 23.2 million bonds were sold directly to institutional investors.

In addition, VietinBank plans to issue second bonds in the third or fourth quarter of 2020 with a volume of VND 3,000 billion, including VND 1,500 billion of 8-year bonds and VND 1,500 billion of 10-year bonds.

Reportedly, VietinBank will use the proceeds from the bonds in 2020 to increase the scale of operations and lend the economy to the expected fields such as electricity production and distribution of electricity and gas; industry, manufacturing, mining

The payment of bond interests will be taken from VietinBank’s interest from the areas where the bank is expected to disburse and other lawful revenue sources provided that the payment does not result in Vietinbank’s business results in the year.

With the payment of bond principal, VietinBank will use the capital raised from the economy and its profit to pay off the bond at the maturity date or repurchase before the bonds.