Vietnam Technological and Commercial Joint Stock Bank (Techcombank) has concluded a landmark US$1 billion syndicated loan facility, setting another milestone in its offshore fund-raising activity. This is to date the largest-ever medium- and long-term syndicated loan for a Vietnamese financial institution. The amount was upsized from the initial target of US$700 million on the back of strong market response.
The facility, announced on June 20, marks Techcombank’s third approach to the offshore loan syndication market, following its inaugural US$500 million transaction in 2020 and the US$800 million financing completed last year.
The fully underwritten financing was selectively launched in late December last year at an original target size of US$700 million with a pre-funding option, and subsequently offered to the wider market in February 2022. The facility comprised three tranches with tenors of three, four and five years, with the latter following the successful precedent set earlier by Techcombank in its US$800 million deal.
The financing offered an interest margin of 140bp on the three-year loan, 155bp on the four-year loan and 170bp on the five-year loan over compounded Sofr (secured overnight financing rate), which was itself a benchmark pricing by a Vietnamese bank in the offshore syndicated loan market. The loan proceeds are for general corporate and working capital purposes, which would bolster Techcombank’s ability to support the increasing medium- and long-term funding needs of its customers as the Vietnamese economy recovers from the Covid-19 pandemic.
Standard Chartered and United Overseas Bank initially underwrote the financing and were joined by fellow mandated lead arrangers, underwriters and bookrunners – ANZ, HSBC and Sumitomo Mitsui Banking Corporation. Bank Negara Indonesia, CTBC Bank, State Bank of India and Taipei Fubon Bank acted as mandated lead arrangers and bookrunners.