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REE raises VND2.318 trillion from fixed rate bonds
Wednesday,  1/30/2019, 13:46 

REE raises VND2.318 trillion from fixed rate bonds

By Hung Le

Employees are at work inside a factory of Refrigeration Electrical Engineering Corporation – PHOTO: REE

HCMC - Standard Chartered Bank (Vietnam) Limited (SCB Vietnam) on January 29 announced that it has successfully placed Refrigeration Electrical Engineering Corporation’s (REE) inaugural VND2.318 trillion fixed rate bonds.

The issue, worth an equivalent US$100 million, was guaranteed by Credit Guarantee and Investment Facility (CGIF), a trust fund of the Asian Development Bank rated AA internationally by S&P. 

The VND2.318 trillion fixed rate bonds come with an interest rate of 7.00% p.a. for a 10-year maturity term.

REE is a listed business group in Vietnam primarily operating in the fields of real estate development and management; mechanical and electrical engineering services; manufacturing, assembling and sales of Reetech air-conditioner systems, as well as power and water utility infrastructures.

The company is one of the first to list on the Hochiminh Stock Exchange and among the 30 largest companies in terms of market capitalization on the exchange.

SCB Vietnam’s expertise and capabilities to execute and distribute the deal has enabled REE to achieve long-term fixed rate funding at a competitive yield. Despite market volatility, bidding interest especially in the longer tranche remains strong.  In view of the favorable pricing, the issuance strategy was adjusted by shifting the 7-year demand into the 10-year tranche.

This is the sixth time that SCB Vietnam has acted as the bond issuance agent for a guaranteed VND-denominated corporate bond issue in Vietnam, reaffirming the bank as the bond issuance agent of choice when it comes to guaranteed local currency bond origination in the country.

“We are delighted to have CGIF onboard with us on our first bond issuance as we tap the capital markets for fixed-rate long-term funding. We see it as an important milestone as we continue to widen our funding options and sources in line with our business development and expansion needs,” Nguyen Ngoc Thai Binh, chief financial officer of REE, said in a statement.

With active issuances of guarantees in the local currency bond markets in the region, CGIF has realized a key aspiration of its stakeholders - to help companies raise long-term fixed-rate funding in matching currencies.

CGIF believes in the importance of deepening the VND capital markets and its vital role in helping the country build a more resilient financial market. The rapid development of the VND corporate bond market since CGIF’s inaugural guarantee for VND bonds in 2014 is extremely encouraging.

This transaction marks the eighth such bonds CGIF has guaranteed in the VND corporate bond market totaling US$532 million equivalent, and solidifies its role as a catalyst for strong bond market development in the country.

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