VietinBank issues bonds worth $43 million

People ride motorcycles past a branch of VietinBank in Hanoi, Vietnam. Photo by Reuters/Kham.

VietinBank, Vietnam’s fourth largest listed bank by market capitalization, is selling bonds worth VND1 trillion ($43 million) to the public.

Of the 100,000 bonds (worth VND10 million or $430 each), half will mature in 2026 and half in 2029. Sales are open from October 7-29.

Interest rates are calculated by reference interest rate plus 1 percent per year for bonds maturing in 2026, and reference interest rate plus 1.2 percent per year for those maturing in 2029.

The reference rate is the average interest on individuals savings, deposited in VND, postpaid for 12-month term deposits by Vietcombank, VietinBank, BIDV and Agribank. The banks offer the interest of around 6.8-7 percent.

The proceeds will be used to increase the bank’s working capital, and to expand credit, while ensuring prudential ratios are in line with regulations, according to VietinBank.

In a September 30 statement, VietinBank had announced it had successfully distributed VND4 trillion ($172 million) worth of bonds to a total of 14,000 individual and institutional investors between August 15 and September 27.