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Treasury & Capital Markets
First healthcare dong bond in Vietnam offered
This landmark bond offering in the healthcare sector in Vietnam aims to lead to better accessibility, quality and affordable healthcare services for the Vietnamese population
Chito Santiago 12 Oct 2018

The Credit Guarantee and Investment Facility (CGIF) continues to contribute to the development of the Vietnamese dong bond market by helping to bring another new issuer into the market.

The trust fund established by the Asian Development Bank (ADB) on October 8 guaranteed the inaugural issuance of Hoan My Medical Corporation amounting to 2.33 trillion dong (US$100 million) in dual tranches. The first tranche was for five years, paying an interest rate of 6.64%, while the second tranche was for seven years with an interest rate of 6.74%.

The transaction represented the first issuance from a private and unlisted group in Vietnam in the capital markets. It also marked the first bond offering from the country's healthcare sector, reflecting the ability of the local bond market to play an important role in funding private healthcare businesses toward better accessibility, quality and affordable healthcare services for the Vietnamese population.

Arranged by Standard Chartered (Vietnam), the deal was about 2.5x oversubscribed. Hoan My group CEO Huynh Le Duc says the issuance enables the company to access the capital markets for fixed rate long-term funding, which better suits the nature of its business, and allowing Hoan My to grow and invest in its healthcare services across Vietnam.

Hoan My is the second Vietnamese company in a month that CGIF helped with their maiden issuance in the dong bond market. In September, it also guaranteed the first dong bond deal by PAN Group Joint Stock Company, amounting to 1.135 trillion dong.

The five-year fixed rate bonds were for five years with an interest rate of 6.80% and were likewise placed through Standard Chartered (Vietnam). It was an important transaction for the agriculture and good group as it enables the company to diversify its funding and investor base.

With active issuances of guarantees in the local currency bond markets in the region, CGIF has helped companies to raise long-term fixed rate financing in matching currencies. It believes in the importance of deepening the dong bond market and its vital role in helping Vietnam build a more resilient financial market.

CGIF first started providing guarantees in the dong bond market in December 2014, closing its inaugural deal with Masan Consumer Holdings, amounting to 2.1 trillion dong for 10 years. It has successfully issued guarantees to bonds in five of the six available local currencies in the Asean bond markets, namely rupiah, peso, Singapore dollar, baht and dong.

Hoan My is the leading and largest private hospital network in Vietnam in terms of the number of hospitals and operating beds. With an integrated network that includes more than 3,407 beds across 14 hospitals and six clinics, it serves over 3.7 million patients annually.

Hoan My is owned by the Clermont Group, an international business group that builds and invests in healthcare, financial services and energy sectors.

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