BIDV, VietinBank continue to raise capital from bonds to increase Tier-2 capital

24-Aug-2021 Intellasia | Doanh nghiep va Tiep thi | 5:02 AM Print This Post

Commercial Joint Stock Bank for Investment and Development of Vietnam (BIDV) has announced the results of the private placement of bonds on August 12th. Specifically, the bank successfully issued 500 billion dong of eight-year bonds. They are non-convertible bonds without secured assets, issued and paid in dong. They establish a direct debt repayment obligation, are secondary debts of BIDV, and satisfy conditions to be included in the bank’s Tier-2 capital according to current regulations.

The interest rate for the bonds issued by BIDV this time is floating, equal to the reference interest rate plus 0.9 percent per annum. In which the reference interest rate is the average personal savings interest rates on term of 13-month at Commercial Joint Stock Bank for Industry and Trade of Vietnam (VietinBank), Commercial Joint Stock Bank for Foreign Trade of Vietnam (Vietcombank), BIDV, and Commercial Joint Stock Bank for Agriculture and Rural Development of Vietnam (Agribank) at the date of determining the interest rate of the interest payment period. The interest rate applied for the first interest payment period is 6.54 percent per annum.

The purpose of the issuance is to increase the size of BIDV’s working capital, create more medium and long-term capital attraction channels to meet the diversified investment needs of customers, ensuring the sustainability of the bank’s capital. The issued bonds are also eligible to be included in Tier-2 capital.

All 500 billion dong of BIDV’s bonds were purchased by a credit institution.

In addition to BIDV, VietinBank has also just announced the 9th and 10th private placements in 2021. Accordingly, the bonds have a term of seven years, and the total issuance value is 100 billion dong. They are convertible bonds, not secured by the assets of the issuer, eligible to be counted in Tier-2 capital.

VietinBank expects to carry out the issuance in August or September 2021.

The interest rate of the bonds is floating, equal to the reference rate plus 0.6 percent per annum. In particular, the reference rate is the average personal savings interest rate on term of 12 months at VietinBank, Vietcombank, BIDV, and Agribank.

 

Category: Finance, Vietnam

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