Agribank gets green light for $218 mln bond issuance

The giant bank recently announced it would issue five million bonds with a face value of VND1 million ($44), tenor of seven years and a floating coupon rate of reference rate plus 1.2 percent.

The reference rate refers to the average of the 12-month deposit rates for individuals at Agribank, Vietcombank, VietinBank, and BIDV, the four biggest state-owned lenders in Vietnam by assets.

Based on Friday’s interest rates, the bond interest rate is 8.1 percent for the first year.

"Interest rates of around 8 percent may not seem so high when compared to other corporate bonds, but still ensures investment efficiency," an Agribank spokesperson said.

"If compared to deposits, the bonds are no less competitive with a 1.2 percent margin and liquidity equivalent to deposits."

The bank said it targets individual and corporate investors with the bond issue, and would use the proceeds for lending and meeting liquidity ratios required by the State Bank of Vietnam.