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Banking & Finance

PAN Group issues $48.8 mn in fixed rate bonds

Released at: 15:19, 13/09/2018

PAN Group issues $48.8 mn in fixed rate bonds

Photo: PAN Group

Bonds guaranteed by ADB trust fund and placed through Standard Chartered Vietnam.

by Hong Nhung

Vietnamese food corporation the PAN Group has successfully issued its inaugural $48.8 million fixed rate bonds, guaranteed by the Credit Guarantee and Investment Facility (CGIF), a trust fund of the Asian Development Bank rated AA internationally by S&P, and placed through Standard Chartered Bank (Vietnam).

The $48.8 million fixed rate bonds bear an interest rate of 6.8 per cent per annum with a five-year term.

The company announced on September 5 a resolution from its Board of Directors approving the plan to issue up to 1,135 bonds with a par value of $43,000. They are non-convertible bonds without warrants that are guaranteed and unsubordinated debt of the company.

PAN is a leading agriculture and food group supplying high-quality agricultural produce and packaged food to the Vietnamese and global markets. It has achieved a robust revenue compound annual growth rate (CAGR) of nearly 80 per cent over the past five years.

The company expects to continue to expand significantly in the next few years. Proceeds from the bond issue will enable it to finance general corporate purposes in its packaged food business, including acquisitions, investments in fixed assets / capital expenditure, and operational expansion.

“The transaction is a significant milestone for the company as it enables us to diversify our funding and investor base as well as to lock-in attractive fixed interest rates for the long term, which indicates the confidence well-recognized financial partners have in PAN and in Vietnam’s agriculture and food sector,” said Ms. Nguyen Thi Tra My, CEO of the PAN Group.

“With CGIF, a trust fund of the ADB, on board with us on our debut bond issuance, and joining hands with prestigious shareholders like the IFC, TAEL, SSI and GIC, among others, in leading and reshaping the agriculture and food industry in Vietnam, we are ready for our next stage of robust growth and our contribution to Vietnam’s economy. We are also honored to have the participation of reputable and well-respected investors in our debut bond issuance at an attractive fixed interest rate.”

PAN is the latest corporate bond issuer to tap the Vietnam dong (VND) bond market in diversifying its sources of funds, contributing to the deepening of Vietnam’s local bond market. With this successful collaboration with CGIF, PAN continues to demonstrate its leading position in the industry with the backing of a strong counterparty in its bond issue. The collaboration with PAN also marks the first time CGIF has issued a reputable guarantee to a company operating in the agriculture business in Asia.

“With the rapid expansion of the country’s economy, we expect more quality corporates like PAN to tap the capital markets for fund raising activities in diversifying their sources of financing,” said Mr. Nirukt Sapru, CEO Vietnam and ASEAN & South Asia Cluster Markets at Standard Chartered Bank.

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