Firm issues first US dollar bonds

The HCM City-listed Hoang Anh Gia Lai Group has raised US$90 million from an overseas bond sale on Wednesday, making it the first Vietnamese private company to sell US dollar bonds.

The coupon for the five-year-non-call-three bonds is set at 9.875 per cent per year. The note was offered at US$96.181.

As planned, the property developer will pay back 20 per cent of the bonds’ principle each year in 2014 and 2015. The remaining 60 per cent will be amortised in 2016, the same time as the bond’s maturity.

Credit Suisse is the sole underwriter of the company’s auction.

Chairman of Hoang Anh Gia Lai Group Doan Nguyen Duc was quoted in financial website vietstock.vn saying that the $90 million bond auction was part of the group’s plan to raise $200 million for rubber and hydropower projects.

The company raised $90 million from $100 million worth of bonds offered in the first phase, with this success acting as an encouragement to continue with the second phase, Duc said.

Financial decision maker network FinanceAsia.com quoted a source familiar with the deal, saying that many investors were keen on Vietnamese credits as there were few threats of further supply from Vietnamese issuers.

The network revealed that the group’s bond auction attracted funds, banks and private banks. Previously, Standard&Poor and Fitch rated the bond as a single B-.

HCM City-based fund manager, John Nolan said that the success of Hoang Anh Gia Lai overseas auction helped display the liquidity of Vietnamese credit after Vinashin’s woes.

“The successful US dollar bond sale helped regain foreign interest in Vietnamese credit, and widened the door for local companies to raise capital overseas,” Nolan added.

Hoang Anh Gia Lai Group targeted a profit of VND3.6 trillion ($171.4 million) this year which might be revised due to the unfavourable conditions in the second and third quarters. — VNS

Tags: Hoang Anh Gia Lai bonds, US dollar bonds