BAC A BANK issues 15 million bonds to meet year-end market demand

Bond market to be vibrant by the end of 2024

MB Securities Joint Stock Company (MBS Research) forecasts that corporate bond issuance activities will be more active in the fourth quarter of 2024 when businesses' capital needs recover, the real estate market begins to flourish, and the need to expand production and business is actively following the economic recovery.

According to data compiled by the Vietnam Bond Market Association (VBMA), in August (as of August 23, 2024), there were 24 corporate bond issuances recorded, with a total value of VND33,391 billion. Accumulated from the beginning of the year until now, the total value of corporate bond issuance reached VND222,752 billion, with 13 public issuances worth VND22,773 billion (accounting for 10.2%) and 206 private issuances worth VND199,979 billion (accounting for 89.8%). In terms of issuance structure by industry, commercial banks dominate the primary market, accounting for 87% of the total issuance value, according to FiinRatings.

For individual investors, the signs of market recovery are a signal of many opportunities to expand investment channels, in which bonds are a safe and long-term choice. But what is a safe bond?

“In fact, there is no such thing as a completely safe bond, but only a low-risk bond. A low-risk bond is a bond of a business with a good credit rating. This credit rating not only reflects the stable financial situation of the business but also demonstrates good resilience to risks from the macro environment, industry risks and internal factors of the business. Businesses with good credit ratings often have a solid financial structure, effective risk management strategies and the ability to respond flexibly to market fluctuations. This helps to minimize the possibility of default, creating peace of mind for investors when holding their bonds,” Ms. Nguyen Thu Binh, Acting Director of Risk Management and Head of Risk Management Department, PVI Fund Management Joint Stock Company shared in the article Corporate Bond Risk Management.

BAC A BANK continues to offer 15 million bonds to the public

In early April 2024, FiinRatings - a member of FiinGroup and a partner of S&P Global Ratings in Vietnam, rated BAC A BANK's long-term issuer credit rating at 'A-' with a "stable" rating outlook. The first point is that BAC A BANK's risk position is assessed at "very good", demonstrated by clearly defined and consistent risk management, combined with a consistent risk appetite aimed at both individual and corporate customers with low risk levels.

BAC A BANK's experience and history of asset quality management have always been good and more cautious than the industry average, along with a lower level of potential risk than the industry thanks to its relatively simple business model and focus on lending.

In fact, through previous issuances, BAC A BANK bonds have always been trusted and chosen by investors thanks to their high liquidity and ease of trading. The bank also fully performs its obligations to pay periodic bond interest and buy back bonds before maturity as committed.

From October 7, 2024, Bac A Commercial Joint Stock Bank (BAC A BANK) officially offered 15 million bonds issued to the public in the 2nd round - Phase 2, with a total offering value of 1,500 billion VND. The bond product issued by Bac A Commercial Joint Stock Bank to the public in the 2nd round - Phase 2 applies a higher interest rate than the normal personal deposit interest rate for a term of 12 months, with a maximum margin of up to 1.9%/year; individual investors as well as organizations can easily own an investment amount of only 50,000,000 VND and 100,000,000 VND, respectively.

In this issuance, BAC A BANK bonds have a face value of VND 100,000/bond; interest is paid periodically every 12 months; including two terms of 07 years and 08 years. The expected time to buy back the bonds is only after 18 months, 24 months and 36 months from the date of issuance, corresponding to each bond symbol.

Symbol Bonds	Quantity	Term	Amplitude First 5 years	Amplitude since 06	Date of implementation right of repurchase
BAB202-07L	6,000,000	07 years	1.2%/year	3.0%/year	18 months
BAB202-07C	6,000,000	07 years	1.5%/year	3.1%/year	24 months
BAB202-08C	3,000,000	08 years	1.9%/year	3.2%/year	36 months

Similar to previous issuances, this batch of bonds of BAC A BANK continues to be non-convertible, non-warrant, and unsecured. The product is distributed directly at the Head Office and BAC A BANK Branches/Transaction Offices nationwide, making it easy to participate.

At the end of the offering on October 28, 2024, BAC A BANK's bonds will be centrally registered at the Vietnam Securities Depository and Clearing Corporation (VSDC) and listed on the Hanoi Stock Exchange (HNX), in compliance with the Government's orientation for developing a healthy and transparent bond market.

Accordingly, investors can proactively trade and mortgage bonds at super competitive interest rates, creating conditions for customers to proactively finance if sudden capital needs arise and fully exercise the rights of bond owners including transfer, donation, mortgage, etc.

With capital added to Tier 2 capital through previous bond issuances, BAC A BANK continues to affirm its stable financial health, timely supply of capital to the economy, ensuring safety ratios in operations and growth targets approved by the State Bank of Vietnam.

"With the orientation of lending to sectors encouraged by the government, with low risk and volatility such as high-tech agriculture and social security, it has helped strengthen BAC A BANK's risk position in nearly 30 years of development. The bank has been maintaining a stable loan portfolio, with more than half of the portfolio structure coming from essential sectors and less affected by market factors such as agriculture, forestry and fishery, processing technology, manufacturing, etc. BAC A BANK especially focuses on providing credit to large enterprises with good credit quality and within the typical lending value chain of BAC A BANK. In addition, BAC A BANK always accompanies and provides investment advice to customers in this industry, so it has a comprehensive understanding of the operating situation, business prospects as well as closely monitors customers' cash flow.", said Mr. Chu Nguyen Binh, Deputy General Director of Bac A Commercial Joint Stock Bank.

BAC A BANK reduces loan interest rates, accompanies customers affected by storm Yagi

Source: https://baodantoc.vn/bac-a-bank-phat-hanh-15-trieu-trai-phieu-dap-ung-nhu-cau-thi-truong-cuoi-nam-1727707462087.htm