The State Securities Commission has just issued an official dispatch approving Lien Viet Post Joint Stock Commercial Bank (LPBank) to offer bonds to the public in 2022, phase 2.
Specifically, LPBank will offer a total of nearly 32.93 million bonds with a par value of VND100,000/bond, equivalent to a total size of VND3,293 billion. This includes more than 29.4 million LPB7Y202203 bonds with a 7-year term and nearly 3.5 million LPB10Y202204 bonds with a 10-year term.
This is a non-convertible, unsecured bond, without warrants, is a subordinated debt and satisfies the conditions to be included in LPBank's tier 2 capital.
The number of bonds offered in the second round is equal to the total number of bonds not yet offered in the first round and the number of bonds expected to be offered in the second round that has been approved.
The interest rate applied to bonds is a floating interest rate, calculated by the reference interest rate (the average interest rate of personal savings deposits in VND, 12-month term, interest paid at the end of the term, listed by BIDV, Vietinbank, Agribank, Vietcombank on the interest rate determination date) plus the margin.
In which, the 7-year term interest rate is the reference interest rate plus a margin of 2.8%/year and the 10-year term interest rate is the reference interest rate plus a margin of 3.1%/year.
In the first interest calculation period, LPBank applies an interest rate of 9.6%/year for 7-year bonds and 9.9%/year for 10-year bonds. This interest rate is about 1.7 - 2 percentage points higher than the highest deposit interest rate that LPBank is currently listing.
In the first interest calculation period, LPBank applies an interest rate of 9.6%/year for 7-year bonds and 9.9%/year for 10-year bonds.
The expected offering period is in the second and third quarters of 2023. The minimum purchase quantity for individual investors is 200 bonds (equivalent to VND 20 million) and 10,000 bonds for institutional investors (equivalent to VND 1 billion).
In case the expected volume of bonds is not fully offered in the second round, the unsold portion will be transferred to the third round.
The increased capital mobilized from bonds will be supplemented by LPBank with medium and long-term capital to meet customers' borrowing needs for medium and long-term projects in the second and third quarters of 2023. Of which, more than VND 3,106 billion will be used for lending to rural agriculture and consumption; the remaining amount will be used for lending to the commercial and food and foodstuff sectors.
Recently, LPBank has just been approved to increase its charter capital by a maximum of VND 11,385 billion, equivalent to issuing an additional 1.13 billion shares according to the charter capital increase plan approved by the 2023 Annual General Meeting of Shareholders.
Specifically, the bank will issue 328.5 million shares to pay dividends to existing shareholders at a rate of 19%; 500 million shares offered to existing shareholders; 300 million shares offered privately to foreign investors and 10 million shares issued under the employee stock option program (ESOP).
After completing the above issuances, LPBank's charter capital is expected to increase from VND 17,291 billion to VND 28,676 billion .
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