Vietnam firms likely to suffer from Credit Suisse downfall

The downfall of Credit Suisse, Switzerland's second-largest bank, is likely to pose problems for some Vietnamese corporations that had used the creditor to conduct business deals with.

Switzerland's largest bank, UBS, agreed on Sunday to buy its longtime rival Credit Suisse for $3.2 billion, and the acquisition is expected to be completed within 2023. Vietnamese experts are of the view that the new owner may sell Credit Suisse’s debts or take back some loans.

Property developer BIM Land is among the Vietnamese firms doing business with Credit Suisse. In May 2021, the company issued $200 million worth of bonds with a term of 60 months, due in May 2026. Credit Suisse (Singapore), Standard Chartered (Singapore) and UBS AG Singapore Branch were the underwriters, with the first being the main underwriter. The collateral used belonged to a third party which is part of the BIM Group ecosystem.

BIM Group is a major conglomerate with large resort projects in northern Vietnam's Quang Ninh province like Halong Marina township (248 hectares), which includes sub-projects like Grand Bay Halong (6.6 hectares), Green Bay Village (10 hectares), Royal Lotus Resort & Villas (4 hectares), and Little Vietnam (3.3 hectares).

Ho Chi Minh City-based real estate developer Novaland, listed on the Ho Chi Minh Stock Exchange (HoSE) as NVL, also has business ties with Credit Suisse. As of December 31, 2022, Novaland had a short-term debt of VND1.2 trillion (over $51 million) with Credit Suisse (Singapore).

Novaland said the debt is part of two loans totaling $251 million for its subsidiary Nova Hospitality JSC. The first of the two is a USD syndicated loan arranged by Credit Suisse (Singapore), joined by the Industrial and Commercial Bank of China Limited’s Hong Kong Branch, Taichung Commercial Bank, Taiwan Business Bank, and others.

The loans have a 42-month term, and $250 million has been disbursed. It is guaranteed by assets to be formed in the future in Ba Ria-Vung Tau province, southern Vietnam. As of December 31, 2022, the outstanding balance was $81.25 million.

In addition, Novaland has about VND8.2 trillion ($348.56 million) in different bond debts at Credit Suisse. They include 1,500 unsecured bonds (VND7.09 trillion equal to over $301 million) that can be converted into NVL shares.

Singapore-headquartered VinFast Trading and Investment Pte. Ltd., a car unit of Vietnamese conglomerate Vingroup, in July 2022 signed international capital arrangement deals with Credit Suisse and Citigroup in advising on underwriting for VinFast’s global capital raising transactions. VinFast expects to raise at least $2 billion from each deal to invest in its electric vehicle and battery complex in North Carolina, the U.S., and for its business activities in the U.S. market.

Credit Suisse (Singapore) has for many years also acted as a financial advisor for Vietnamese conglomerate Masan Group (HoSE: MSN) in its international capital-raising deals.

Masan Group said earlier this month it had finished a roadshow for a new $650 million syndicated loan in 2023 underwritten by BNP Paribas, Credit Suisse, HSBC, Standard Chartered, and United Overseas Bank (UOB).

Data collected by The Investor shows that Masan has in March placed mortgages at Credit Suisse (Singapore) and other foreign banks.

Vietnam’s FLC Group (HoSE: FLC) in 2018 reached an agreement with Credit Suisse (Singapore) for disbursing a $200 million credit package, guaranteed by the rights to make capital contributions to subsidiaries of FLC. By the end of 2021, FLC had cleared all debts at Credit Suisse.