Electric car maker VinFast raises $219 mln worth of bonds

VinFast, a subsidiary of Vietnam’s biggest listed company Vingroup, has completed a bond issuance worth VND5 trillion ($218.7 million) to fuel its electric car business.

The bourse said the issuance of 50 million bonds, with par value of VND100,000 ($4.3) each and a maturity of 36 months, occurred from December 27, 2021 to March 8.

Information about the yield rate is not disclosed. The proceeds will be spent on equipment, intellectual property, services etc. for the VinFast auto making complex in Haiphong city, northern Vietnam.

Collateral for the bonds are Vinhomes (HoSE: VHM), Vietnam’s biggest property developer, and all the real estate, moveables and asset rights at the eco-tourism and culture park project Vinpearl Land in Khanh Hoa province. The collateral also includes other assets that VinFast and some third parties own.

This is the fourth bond issuance of VinFast from the beginning of November 2021. On November 1, 2021, the firm issued VND1.5 trillion worth of bonds. From December 6, 2021 to January 1, 2022, it made two other issuances worth VND5 trillion in total. The four issues brought VinFast VND11.5 trillion ($503 million).

HSBC last week partnered with other banks to provide the first green syndicated loan worth $500 million to Vingroup and VinFast.

The financing aims to support the duo in capital expenditure, working capital and corporate purposes in compliance with Vingroup’s 2021 green loan principles and its sustainable finance framework.

VinFast will stop making internal combustion engine models from the end of 2022, with the ambition to become a global smart electric vehicle company as it goes all-electric. It sold its first electric car in January 2022.

The firm said on December 4 it wants to motor towards a US listing in the second half of 2022, which Refinitiv publication IFR says could raise up to $3 billion.

Vinfast is 51.5% owned by Vingroup. Vingroup, once a real estate and retail group, has grown to become Vietnam’s largest listed company. Its core businesses are now electric cars, real estate development (residential complexes, resorts and retail space), technology research (cloud computing, AI, big data...), education and medical care.