Domestic corporations turn to global credit financing sources

Viet Capital Securities last week announced a new $100 million syndicated loan package from a group of leading financial institutions, led by Maybank Kim Eng Securities, with Malayan Banking Berhad (Singapore branch) as one of the lenders. The loan package is expected to be disbursed in two phases, with a maximum credit of up to $150 million.

Other major banks participating in loan syndication include First Commercial Bank, Hua Nan Commercial Bank, Taishin International Bank, Chang Hwa Commercial Bank, Taiwan Business Bank, Taiwan Cooperative Bank, KEB Hana Bank, and Sunny Bank.

An IFC-led loan will support VIB to boost its loan portfolio for individual customers, Le Toan

Vietnamese securities firms, such as VNDIRECT, have also wrapped up syndicated loan packages for new additional capacity to broaden their horizons and provide fresh financial services to customers. Earlier this month, the company announced its enrolment in a $75 million offshore unsecured syndicated loan with the greenshoe option to increase the total limit up to $200 million from foreign financial institutions, including Maybank Securities Pte., Ltd. – a member of Maybank Investment Banking Group – and Taipei Fubon Commercial Bank Co., Ltd. as the co-lead arrangers for the loan.

This is the second offshore syndication VNDIRECT has raised in 2022 to provide working capital for its business and future activities.

Also in November, VIB completed the disbursement of a $150 million loan from the International Finance Corporation (IFC). With a term of five years, the IFC-led loan aims to support VIB to boost its loan portfolio for individual customers looking to buy, build, and repair houses. Meanwhile, at least 30 per cent of the disbursement value will be financed for home loans worth less than $35,000.

In addition, this bank has just announced a report to collect shareholders’ opinions on adjusting foreign investors’ maximum share ownership to 30 per cent. Its current largest foreign strategic shareholder, Commonwealth Bank of Australia, has been holding about 20 per cent from 2010 to now.

“IFC’s disbursement of a loan with a term of up to five years to VIB shows the trust that partners have for the bank,” said Han Ngoc Vu, general director of VIB.

“This new loan will be added to the bank’s capital structure, used to better meet customers’ needs and enhance its stability in the face of market fluctuations.”

SeABank also raised capital from the US International Development Finance Corporation with a loan of $200 million.

Previously, VPBank successfully signed a syndicated loan agreement worth $500 million from five major financial institutions, including the Asian Development Bank, Sumitomo Mitsui Banking Corporation (SMBC), Japan International Cooperation Agency, ANZ Bank and Maybank Securities Pte., Ltd., a member of Maybank Investment Banking Group.

The above international loan is the second successful capital mobilisation by VPBank in 2022 after the bank was disbursed a $600 million syndicated loan in April from major European financial institutions in Asia, including SMBC, Maybank, Cathay United Bank, CTBC Bank, and the Central Bank of India.

“VPBank has continuously consolidated its strong financial potential to meet the increasing credit needs of customers for production and business activities as well as investment and development, by proactively diversifying capital sources both domestically and abroad,” a senior leader of VPBank said.

Besides the financial services sector, Vietnamese conglomerate Masan Group and The Sherpa Company, a direct subsidiary of Masan, have wrapped up a $600 million syndicated term loan to enhance their footprint, marking the largest syndicated advance it has ever raised. While in syndication, the deal attracted 37 lenders despite several obstacles. The initial target of $375 million was upsized to $600 million on the back of a strong market response.

HSBC acted as joint mandated lead arranger, underwriter, and bookrunner on this landmark transaction. Stephanie Betant, head of Wholesale Banking at HSBC Vietnam, noted, “We are delighted to contribute to the development of Vietnam’s consumer market through this breakthrough deal. Despite the uncertain global environment, we have successfully arranged the fully underwritten transaction to fuel Masan’s passion for uplifting the lives of Vietnamese consumers.”

According to FiinRatings, the actual cost of foreign currency-denominated debts may fluctuate between 13 and 17 per cent due to various elements, such as nominal interest rates, exchange rate insurance charges, guarantee costs, and transaction fees.

In light of stringent and restricted domestic capital mobilisation channels and limited M&A agreements, overseas financial sources and syndicated loans are nonetheless seen as a promising indicator for business expansion.

“This demonstrates the faith of international financial institutions in the sustainable development of significant Vietnamese firms, provided that the necessary data and credit profile are transparent. Fundraising events may go forward as planned and their risk profiles will be considered in the interest rates. Some businesses have been able to alleviate debt maturity pressure and the requirement for debt restructuring,” FiinRatings said.

Implications of digital assets in M&A Digital assets have gained a lot of attention over retail investors, institutional investors, companies and policymakers in recent years. Despite the dramatic decline of the market, the potential growth for digital assets over the upcoming decade is expected to be high and reach tenths of trillions of US dollars market capitalisation according to prominent money managers like Fidelity and Ark Invest.

Masan moves demonstrate room for cross-sector growth Masan Group’s activities over the past year or so have shed a spotlight on Vietnam’s merger and acquisition market thanks to the group’s dealmaking efforts to transform business models.

M&A Vietnam Forum 2022: 'Igniting new opportunities' The 14th Vietnam M&A Forum 2022 organised by Vietnam Investment Review under the auspices of the Ministry of Planning and Investment took place in Ho Chi Minh City on November 23.