Corporate bond rate rises to 20pct

15-Nov-2019 Intellasia | VnEconomy | 7:36 AM Print This Post

In early November 2019, Hong Hoang Commercial Investment Joint Stock Corporation pledged 60,771,055 Asia Commercial Joint Stock Bank (ACB) shares owned by Hong Hoang Commercial Investment to Saigon Asia Credit Limited, which was an organisation registered in the Cayman Islands. On October 29, 2019, Hong Hoang Investment and Trading Joint Stock Company successfully issued 1.4022 trillion dong of non-convertible bonds, with a five-year term for a foreign organisation and the actual issuing interest rate of 20 percent per year.

This type of bond was secured by assets of the issuing organisation and of other related organisations or individuals under a specific agreement with the investor. This was also a type of bond that could be resold by bondholders to issuers ahead of schedule. The consultant and agent was ACB Securities Company Limited.

The interest rate of 20 percent per year could be considered as an extremely high threshold, and temporarily was the peak of the group of five-year corporate bonds. However, it was still not the peak of the corporate bond market in recent days. In December 2018, Quang Thuan Investment Joint Stock Company successfully issued a batch of 3 trillion dong of bonds, with a term of three years, and the interest paid for the first six months amounted to 314.4 billion dong, equivalent to 10.5 percent of the principal, which meant the real interest rate had risen to 21 percent per year.

Elsewhere, Hong Hoang Commercial Investment Joint Stock Corporation was an organisation operating in the field of management consultancy, established in 2016 by three members residing at the same ownership address, including Dang Anh Tuan, Dang Anh Vu, and Pham Thi Khanh Hong.

In early November 2019, Hong Hoang Commercial Investment Joint Stock Corporation pledged 60,771,055 ACB shares owned by Hong Hoang to Saigon Asia Credit Limited. Before that, Hong Hoang Commercial Investment Joint Stock Corporation also used its account at ACB as collateral for transactions with collectors of Vietnam Finance Limited and Saigon Asia Credit Limited. Both Vietnam Finance Limited and Saigon Asia Credit Limited had business licenses in the Cayman Islands.

 


Category: Finance, Vietnam

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