VNRE - Vincom Joint Stock Company, Vietnam’s largest real estate company, has returned to the international convertible bond market less than three years after its landmark debut convertible bond (CB) in 2009, raising US$185 million.
This is Vincom’s second convertible bond issue since its US$100 million debut CB offering in November 2009, which was also the first ever offshore CB issued by a Vietnamese corporate.
The latest transaction was launched with a base issue size of US$150 million with an upsize option of US$100 million, part of which was exercised at the time of pricing. The remaining US$65 million upsize can be exercisable within 30 days after the deal’s closing date on April 2012.
The US dollar-denominated bonds carry a coupon of 5 percent and are convertible into the ordinary shares of Vincom at a conversion price of 112,200 dong (USD5.4), which represents a premium of 10 percent over the stock close of 102,000 dong on March 28.
The CB, which matures in 2017, comes with an investor put option at year two, giving investors a choice to sell the bonds back to the issuer in April 2014. The transaction features annual conversion price reset on October 3 each year until 2016. The conversion price cannot be adjusted to less than 80% of the initial conversion price.
The company plans to use the net proceeds to finance investment in property developments, working capital and general corporate purposes.
The CB provides the company with long-term financing at attractive terms and diversifies its sources of funding, the company noted in a statement.
“We are encouraged by the strong interest for [the transaction], which emphasises the attractiveness of Vincom and Vietnam’s real estate sector,” Mai Huong Noi, Vincom’s general director said in the statement. “The interest rate of 5 percent is attractive for such unsecured CBs. Vincom has been a leader for Vietnamese companies to access international markets, and we hope this transaction will enable other companies to follow suit.”
The company held site visits in early March in Hanoi for potential investors and went to roadshows in Hong Kong and Singapore where it met over 30 investors in one-on-one and group meetings before pricing the transaction on March 28.
Credit Suisse, which was the sole bookrunner for the Vincom’s debut CB offering, was again the sole bookrunner in the current transaction. The bonds will be listed on the Singapore Exchange.
Vincom, with a market capitalization of approximately US2.56 billion, is the largest listed real estate company in Veitnam by market cap. The company develops, leases out and sells retail, office, residential, resort and mixed-use properties in major cities in Vietnam.
Reported by Gita Dhungana | The Asset