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Banking & Finance

ACB bond issue raises $90 million

Released at: 15:09, 13/07/2016

ACB bond issue raises $90 million

Photo: Duc Anh

Asia Commercial Bank issues 20,000 bonds, according to stock exchange declaration.

by Duy Anh

The Asia Commercial Bank (ACB) has raised VND2 trillion ($89.7 million) from issuing 20,000 bonds according to a statement it sent to the Ho Chi Minh City Stock Exchange (HSX) on July 11.

There were 17,150 unsecured bonds sold directly to seven institutional investors while 2,850 were sold to 27 individual investors. No foreign investors participated.

ACB’s bonds have a five year and one day term, with a first year interest rate of 8.5 per cent and the rate for second to fifth years being the reference rate of Vietcombank and Agribank plus 2 per cent.

With the additional VND1.96 trillion ($87.9 million), after deducting the issue’s expenses, the Ho Chi Minh City-headquartered ACB will bolster both its main and supplementary capital source. Its liquidity risk will also be minimized, according to its statement.

According to its prospectus issued on June 2, ACB will use the capital gained for mid and long-term lending. There will be three disbursement periods (June, September and November 2016) with a total of 22 enterprises receiving loans.

They include the PetroVietnam General Service Joint Stock Corporation (Petrosetco), with VND360 billion ($16.1 million), the Northern Power Corporation (NPC) with VND350 billion ($15.7 million), Electricity of Vietnam’s Hanoi Power Corporation (EVN Hanoi) with VND250 billion ($11.2 million), the Saigon Water Corporation (Sawaco) with VND150 billion ($6.7 million), and the T.V.P Steel Joint Stock Company (T.V.P Steel) with VND100 billion ($4.5 million), among others.

ACB’s original plan was to issue bonds in three different periods, with VND800 billion ($35.9 million) issued in June, VND600 billion ($26.9 million) in September, and VND600 billion ($26.9 million) in November 2016.

After the issue the bank will owe a total of VND208 trillion ($9.3 billion), with short and mid and long-term loans of VND128 trillion ($5.7 billion) and VND80 trillion ($3.6 billion), respectively, up VND6.6 trillion ($296 million) compared to the same period last year. ACB’s charter capital was VND9.4 trillion ($421.6 million) as at June 30, according to the statement.

The bank expects 2016 pre-tax profit of VND1.5 trillion ($67.3 million), up 14 per cent compared to last year. Profit in the first quarter was VND400 billion ($18.2 million), ACB’s CEO Do Minh Toan told the annual shareholders meeting on April 8.

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