Masan Consumer Holdings issue landmark bond transaction to boost expansion drive

December 15, 2014 | 10:17
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Masan Consumer Holdings, a wholly-owned subsidiary of Masan Group, which is one of Vietnam’s largest private sector business groups, last week eyed a landmark deal after raising $100 million from a bond sale.

Masan is using the $100 million bond issue to boost its already enviable market position

The 10-year bond transaction is something of a rarity for a Vietnamese private sector company. At the total amount of VND2.1 trillion ($100 million) and a fixed rate coupon of 8 per cent per annum for the entire tenure of the bonds, the transaction would be both the largest and lowest coupon issuance attributed to a 10-year deal in the Vietnamese private-sector corporate bond market.

Such terms reflect the long-term nature of Masan Consumer Holdings’ commitment to consumer-related businesses and its strong business platform. This transaction has also introduced a new, longer maturity asset class into the market, making it an attractive investment instrument for insurance companies to diversify their assets into non-sovereign holdings. The deal was fully subscribed by financial companies, primarily global insurance companies with operations in Vietnam.

The bonds are guaranteed by the Asian Development Bank’s (ADB) credit guarantee and investment facility (CGIF) trust fund.

This is the first bond in Vietnam to be guaranteed by CGIF, a multilateral facility whose contributors include certain governments of the ASEAN members, Japan, Korea, and China, as well as the ADB.

As a key component of the Asian Bond Market Initiative of these governments, CGIF is committed to mobilising Asia’s savings for the development of the ASEAN local currency bond market and supporting strong ASEAN corporate or project bond issuers.

“As CGIF’s first transaction in Vietnam, this marks another milestone in our journey of supporting the development of local currency bond markets in the ASEAN+3 region by backing strong national champions. In that context, we are glad to partner with Masan Consumer Holdings, which has successfully built winning consumer businesses in Vietnam by combining international best practices with superior local execution,” said CGIF CEO Kiyoshi Nishimura.

Masan Consumer Holdings is Masan Group’s main vehicle for consumer-focused businesses. The proceeds of the bond will be reinvested in consumer-focused businesses. Standard Chartered Bank acted as the issuer’s agent in this transaction, while Societe Generale Corporate and Investment Bank acted as the international advisor, with local Techcombank Securities acting as the agent for the bonds.

By By Anh Duc

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