Techcombank adopts international bond sale practices

The Hanoi based Technological and Commercial Bank, or Techcombank, will issue bonds worth 3 trillion dong (US$187.5million) inline with international practices, general director Nguyen Duc Vinh told the Daily. Techcombank has already been rated by Moody’s and had its financial reports audited by KPMG, Vinh said.

It is the first Vietnamese bank rated by Moody’s, with the international rating agency last year giving the bank ‘B1′ for foreign currency deposits, ‘Ba1′ for dong deposits, ‘Ba2′ for foreign currency issues, ‘Bal’ for dong issues and ‘D-’ for bank financial strength. An update on the ratings is available now, Vinh added.

The unlisted joint-stock lender has appointed HSBC as the sole manager and book runner for the five-year term bonds that will be launched and priced in the near future subject to market conditions.

Techcombank will sell the bonds to institutions only, with half of the papers for investors abroad. Its strategic shareholder HSBC is mandated to give Techcombank advice on coupons of the bonds as well as find buyers for them.

Techcombank was allowed by the State Bank of Vietnam (SBV), the country’s central bank, to issue 4 trillion dong worth of bonds in total. Vinh said his bank would consider issuing the remaining one trillion dong later.

British lender HSBC early July received approval from the SBV to issue bonds worth as much as 8 trillion dong in total. Earlier, it planned to launch four issues to raise the amount, of which five trillion dong is denominated in the dong and the remainder in the US dollar. However, no bonds have been sold so far.

HSBC now has two branches in Vietnam -one in Hanoi and the other in HCM City -and a representative office in the Mekong Delta city of Can Tho. Besides, it owns 15% of Techcombank’s capital, becoming the first foreign bank that holds such a high stake in a local lender.

 

Category: Finance