The Credit Guarantee and Investment Facility (CGIF) has closed its first guarantee for a Vietnamese dong bond. MasanConsumerHoldings (MCH), a subsidiary of Masan Group Corporation issued a 2.1 trillion dong (US$96.96 million) bond in Vietnam on December 5 2014, marking the first time a non-bank corporate bond has been issued with a 10 year tenure in recent years. In a market devoid of corporate issuers and long-term bonds, this bond issuance is a very significant milestone for the development of Vietnamese dong bond market, CGIF said.
"We welcome the first operation of CGIF in Vietnam which marks a step forward for guarantee services provided by a Asean+3 regional institution in Vietnam. We emphasize that this first operation will significantly contribute to the development of not only local-currency corporate bond market in Vietnam, but also Asean+3 regional bond markets. As one of the contributors to CGIF, the ministry of finance of Vietnam commits its strong support for the CGIF guarantee services in Vietnam,” said Nguyen Ba Toan, deputy director general, department of international cooperation, the ministry of finance of Vietnam.
“We have worked extremely hard to make this transaction a reality for Vietnam as part of the regional bond markets and the experience sets an important foundation for CGIF and the market participants to take the Vietnamese dong bond market to the next level,” noted Kiyoshi Nishimura, CGIF’s chief executive officer.
"We are excited to be the first issuer in Vietnam whose bonds have been guaranteed by CGIF. This transaction represents a landmark for the Vietnamese bond market, with the participation of long-term, reputable debt investors, a 10 year tenure and an attractive fixed interest rate. This enables us to further grow our platform to tap the consumption potential of Vietnam,” added
Nguyen Thieu Nam, chairman of MasanConsumerHoldings and deputy CEO of Masan Group.
With active issuances of guarantees in the local currency bond markets in the region in recent months, including this transaction, CGIF has realized a key aspiration of its stakeholders, to help companies raise long term fixed rate funding in matching currencies. This access allows companies to make long term investments when risks associated with refinancing as well as interest and foreign exchange rate volatility dissipate.
Developing this capability in the Vietnamese dong bond market has been CGIF’s key priority to lead the way for more long term investments including those needed for infrastructure in Vietnam. Standard Chartered acted as the issuer’s agent and Societe Generale Corporate and Investment Bank was the international advisor in the MCH transaction.
This transaction marks CGIF’s sixth guarantee issued. To date, CGIF has successfully issued guarantees to bonds in four Asean currencies – Indonesian rupiah, Singapore dollars, Thai baht and Vietnamese dong.
