Vingroup issues Vietnam’s first corporate dollar bond

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Vincom Center HCMCHanoi-based real estate firm priced Vietnam’s first ever dollar bond from the corporate space despite investor scepticism towards the credit, sector and the nation’s macro conditions, Finance Asia reported.

Vingroup Joint Stock Company raised a $200 million 4.5-year senior high-yield note with a callable option in the third year on October 31, defying investor concerns circling the lack of transparency plaguing Vietnamese real estate corporate profiles as well as weak domestic economic fundamentals.

The 144a/Reg S notes – which are guaranteed by its subsidiaries including Vincom Retail – ended up pricing tighter than initial guidance of about 12 per cent despite investor challenges, achieving a yield of 11.875 per cent.

Some of the closest comparables for Vingroup’s bond were the notes of other property companies from the region, including Indonesia-based Lippo Karawaci, China’s Agile property and Kaisa Group, all of which were trading around the 7 to 8 per cent area at the time of pricing, notes a source.

Although a syndicate banker admits that not every investor has been convinced by the creditworthiness of the issuer, there was nonetheless a sufficient amount of investor demand that allowed the note to print.

Despite the rocky start, Vingroup’s bond fared pretty well in secondary markets, rising from a reoffer price of 99.147 to 101 on November 1.

Vingroup’s bond had an order book of more than $470 million from 100 over accounts. Fund and asset managers scooped up a bulk of the papers, accounting for 66 per cent, following by private and retail banks with 25 per cent and financial institutions and others 9 per cent. Asian issuers subscribed to 60 per cent of the notes, followed by US 25 per cent and Europe 15 per cent.

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Reading Time: 1 minute

Hanoi-based real estate firm priced Vietnam’s first ever dollar bond from the corporate space despite investor scepticism towards the credit, sector and the nation’s macro conditions, Finance Asia reported.

Reading Time: 1 minute

Vincom Center HCMCHanoi-based real estate firm priced Vietnam’s first ever dollar bond from the corporate space despite investor scepticism towards the credit, sector and the nation’s macro conditions, Finance Asia reported.

Vingroup Joint Stock Company raised a $200 million 4.5-year senior high-yield note with a callable option in the third year on October 31, defying investor concerns circling the lack of transparency plaguing Vietnamese real estate corporate profiles as well as weak domestic economic fundamentals.

The 144a/Reg S notes – which are guaranteed by its subsidiaries including Vincom Retail – ended up pricing tighter than initial guidance of about 12 per cent despite investor challenges, achieving a yield of 11.875 per cent.

Some of the closest comparables for Vingroup’s bond were the notes of other property companies from the region, including Indonesia-based Lippo Karawaci, China’s Agile property and Kaisa Group, all of which were trading around the 7 to 8 per cent area at the time of pricing, notes a source.

Although a syndicate banker admits that not every investor has been convinced by the creditworthiness of the issuer, there was nonetheless a sufficient amount of investor demand that allowed the note to print.

Despite the rocky start, Vingroup’s bond fared pretty well in secondary markets, rising from a reoffer price of 99.147 to 101 on November 1.

Vingroup’s bond had an order book of more than $470 million from 100 over accounts. Fund and asset managers scooped up a bulk of the papers, accounting for 66 per cent, following by private and retail banks with 25 per cent and financial institutions and others 9 per cent. Asian issuers subscribed to 60 per cent of the notes, followed by US 25 per cent and Europe 15 per cent.

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