The Vietnam National Coal and Mineral Industries Group (Vinacomin) has sold only 17 percent of the VND3 trillion worth of bonds launched on the local market due to a lower coupon than expected.
Nguyen Van Bien, deputy general director of Vinacomin, said by the end of the bond purchase registration in June 29, four investors had registered to buy a combined amount of VND500 billion with a coupon of 14.5 percent for the first year.
Vinacomin last year had a plan to issue 3,000 bonds worth VND1 billion each with terms of 5-7 years in 2012. Vinacomin bonds are sold under the form of book entry, with floating coupons paid annually.
Bien said the dong bond sale in 2012 aimed to raise funds for the projects to be executed in 2012-2015. It is also part of the coal-mineral industry development plan approved by the government.
In 2010, Vinacomin’s plan to issue $500 million worth of bonds in the international market was canceled as a weak response from the market after several road shows.
ANZ Vietnam and Vietnam Bank for Industry and Trade (Vietinbank) are consultants and bond sale agents for Vinacomin. “Using bonds as one of the middle- and long-term capital mobilisation channels is a right move of the group,” said Tareq Muhmood, general director of ANZ Vietnam, in a statement issued last week.
However, financial market analysts predicted the dong bond market would not prosper from now to the year’s end. In the stock market, foreign investors have reduced net buying and switched to net selling since the second quarter under the impact of the euro zone debt crisis and the Vinalines graft scandal.
Notably, according to Bao Viet Securities Co. (BVSC), Vingroup last week wrapped up its second bond issuance. The international convertible bonds worth a total of $115 million have a coupon of 5 percent per year.
The unsecured five-year bonds are listed on the Singapore Stock Exchange and the bond coupon is paid biannually.
The conversion price of the bonds is VND88,000 each. The bonds offered this time will combine with the previously issued ones to form a unique lot worth as much as $300 million.