By the end of this October, Vietinbank will issue the second tranche of its bond issuance this year worth VND1 trillion (US$43 million).
The bond has the par value of VND10 million and has two terms, including seven years and 10 years.
This offering is part of Vietinbank’s plan for bond issuance with total value of VND5 trillion in 2019. The bank successfully sold VND4 trillion bonds last month.
The yield of seven-year bonds is equal to the reference interest rate plus 1 per cent per annum and for 10-year bonds is additional 1.2 per cent per annum. The reference interest rate is the average deposit rates of 12-month savings of four banks including Vietinbank, Vietcombank, BIDV and Agribank.
The issuance aims to supplement working capital for the bank and ensure adequate capital for lending to the economy. The sale takes place during October 7 and October 29.
With the proceed of VND5 trillion from the two issuances, Vietinbank will disburse VND1.5 trillion for loans in the energy sector, VND1.4 trillion into construction material, VND500 billion into construction and the remaining into other fields.
All of these bonds will be listed on the stock exchange.
In a related development, the Bank of Tokyo-Mitsubishi UFJ, a commercial banking subsidiary of Mitsubishi UFJ Financial Group which holds nearly 20 per cent capital of Vietinbank, said it expected Vietinbank to complete its capital hike plan as soon as possible.
It the meeting with Vietinbank’s leaders on Tuesday, Masaaki Suzuki, representative of the Japanese bank, said it has supported Vietinbank’s all efforts in accelerating the capital raising process.
