Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDVBID) recently announced that it would issue 5 million bonds with par value of 100,000 dong per bond under the mode of agents and directly issue 450,000 bonds of par value 10 million dong per bond through BIDV’s branches, transaction offices and headquarters in Q4/2019.
Specifically, BIDV would issue a total of 5 trillion dong of bonds to the public with a term of seven-year (maturing in 2026) and ten-year term (maturing in 2029). The registration period was from November 1 to November 20.
All bonds offered were non-convertible bonds, not accompanied by warrants, not guaranteed by BIDV’s assets, established direct repayment obligations, and satisfying the conditions to be included in Tier II capital of BIDV.
In particular, the 2026 bond interest rate was calculated by reference interest adding 1.3 percent per year and 2029 bond interest rate by reference interest adding 1.4 percent per year. The reference interest rate was the average interest rate of 12-month individual savings deposits of Vietnam Bank for Agriculture and Rural Development (Agribank), Vietnam Joint Stock Commercial Bank for Industry and Trade (Vietinbank), BIDV and Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank).
Capital raised from the issuance of 4.5 trillion dong of bonds through BIDV’s branches would be used to supplement the working capital and meet the lending needs for medium and long-term projects. That also included the temporary balancing of funds for disbursed loans according to the project schedule in areas approved by the State Bank of Vietnam (SBV).
As of September 30, 2019, BIDV had issued bonds with a total value of 25.91 trillion dong. In which, the capital raising bond was over 18.359 trillion dong.
