Foreign lenders offer up new capacities in Vietnam

August 03, 2021 | 15:49
Taiwanese and South Korean financial institutions are pinning their faith on Vietnam’s equity market thanks to the tremendous growth opportunities, underpinned by the greater demand and skyrocketing liquidity in the country’s stock exchange landscape.
SSI Securities Corporation gets an unsecured loan worth US$100 million from some of Taiwanese leading banks. - Photo courtesy of SSI
SSI Securities Corporation gets an unsecured loan worth US$100 million from some of Taiwanese leading banks. Photo courtesy of SSI

Last week, SSI Securities Corporation – Vietnam’s largest brokerage – inked a $100 million credit facility agreement with a consortium of leading Taiwanese financial institutions, including Union Bank of Taiwan, Taipei Fubon Commercial Bank, Bank of Taiwan, Taiwan Shin Kong Commercial Bank, and Hua Nan Commercial Bank, among other institutions.

The 12-month unsecured syndicated loan package, with preferential rates, is slated to be disbursed in two different phases.

Particularly, Union Bank of Taiwan and Taipei Fubon Commercial Bank are the mandated lead arrangers and bookrunners of the deal.

Last December, SSI broke fresh ground when the brokerage signed a mortgage loan agreement of $85 million with a group of nine foreign banks, led by Taipei-headquartered Union Bank of Taiwan.

Previously in 2019, SSI also wrapped up a $55 million loan from a group of foreign lenders led by Bank SinoPac to become the first security company in Vietnam to access unsecured foreign loans.

In mid-May, a consortium of seven Taiwanese financial institutions, led by First Commercial Bank, earmarked a syndicated loan package of $44 million to Ho Chi Minh Securities Company (HSC).

The syndicated loan for HSC is the first that First Commercial has made since the bank’s establishment of its Ho Chi Minh City branch. A bank representative said, “First Commercial and partners appreciate HSC’s firm position in the domestic market, with sustainable growth, a foundation of financial and risk management meeting international standards. This loan will help HSC continue to implement its development strategy in the coming years.”

In April, a group of foreign banks, including Taipei Fubon Commercial Bank Vietnam, Cathay United Bank Vietnam, and Woori Bank Vietnam (Bac Ninh branch) rolled out a $60 million syndicated loan for VietinBank Securities – the brokerage arm of state-owned lender VietinBank. Woori Bank specifically provided $50 million, while Taipei Fubon and Cathay United provided $10 million altogether.

In March, VietinBank Securities also successfully secured a $30 million syndicated loan with a 12-month tenure from a group of four Taiwanese lenders. These types of deals would lay a concrete foundation for the brokerage to boost its activities in terms of margin lending, international loan advisory, and financing arrangements.

Besides loan contracts, Taiwanese exchange-traded funds (ETFs), such as Fubon FTSE Vietnam ETF, have also increased their footprint in the Vietnamese equity landscape. As of July 26, the fund’s scale reached nearly $566 million, becoming the most active ETF in the country.

Nguyen Ngoc Anh, director of Investment Banking Division of SSI, told VIR, “Unsecured syndicated loans which involve a consortium of lenders is having a real moment here in Vietnam thanks to the domestic stock market’s tremendous growth opportunities.”

“However, foreign financial institutions also often grant unsecured credits based on borrowers’ financial soundness, reputation, transparency, future outlook, potential growth, and how their propositions outweigh others competitors.”

By Luu Huong

What the stars mean:

★ Poor ★ ★ Promising ★★★ Good ★★★★ Very good ★★★★★ Exceptional