Issuing bonds, especially convertible bonds, to mobilise capital is considered a wise choice for many banks in the context of cash mobilisation facing difficulties despite continually increased interest rates.
After two years of silence, capital mobilisation through bonds has taken off again with a series of banks launching successful issuances such as the Technical and Commercial Joint Stock Bank of Vietnam (Techcombank) and the Military Bank (MB).
Bond issuance not only helps enterprises take the initiative in calculating capital mobilisation costs but also supplements medium- and long-term capital sources and reducing pressure on banks in setting time-limits on interest rate payments.
In addition, to ensure a roadmap of increasing banks’ chartered capital to VND3 trillion by late 2010 under the State Bank of Vietnam’s regulations, banks have also sped up the issuance of convertible bonds.
The Saigon-Hanoi Commercial Bank (SHB) has received approval to issue convertible bonds worth VND1.5 trillion in total for its existing shareholders and strategic partners. After one year, these bonds will be converted into shares at a ratio of 10 shares to one bond.
VOVNews/VNA