Goldman Sachs Group Inc., Morgan Stanley and Deutsche Bank AG are among 13 financial institutions that submitted bids to advise Vietnam Joint Stock Commercial Bank for Industry & Trade on its planned $500 million overseas bond sale, according to Deputy General Director Le Duc Tho.
Others that sent in bids include HSBC Holdings Plc, Standard Chartered Plc, Australia & New Zealand Banking Group Ltd. and BNP Paribas SA, Tho said in a telephone interview Monday.
The sale would be the first international offering of Vietnamese notes this year and will test investor confidence in the country, which has struggled to damp Asia's fastest inflation as its currency slid to the worst-performing in Asia.
"They need a good, recognizable name to help them with the bond sale," said Francois Chavasseau, Ho Chi Minh City-based head of fixed income research at Sacombank Securities Joint Stock Co. "Vietnam is still viewed as quite a risky place at the moment by foreign investors. Whether a big name will be enough to win more confidence, I'm not sure."
The country's second-largest listed lender by market value, commonly known as VietinBank, has sought approval from the country's central bank to sell $500 million of bonds overseas later this year, Tho said earlier this month. The sale would be the first of dollar-denominated notes for the bank, according to data compiled by Bloomberg.
Vietnam's banking system is weak and non-performing loans are "heavily understated" in official data, Fitch Ratings said in an Aug. 8 note. The extra yield investors demand to own dollar debt sold by Vietnam instead of similar-maturity Treasuries has risen 110 basis points this quarter to 445 basis points, according to JPMorgan Chase & Co.'s Asia Credit Index.
VietinBank is rated at B by Fitch, the fifth-highest non- investment grade rating, according to data compiled by Bloomberg. Tho said in May the lender planned to sell between $500 million and $1 billion of bonds late in the third quarter or early in the fourth quarter of the year. It opted for a lower amount after reassessing its financial needs and due to global market conditions, Tho said Aug. 22.
The lender's shares gained 2 percent to 25,900 dong at close on the Ho Chi Minh City Stock Exchange today. The dong, has slid 6.4 percent this year, according to data compiled by Bloomberg. It was devalued by about 7 percent in February, the most since at least 1993.
Vietnam's inflation accelerated to 23 percent this month, the highest rate among 17 Asian economies tracked by Bloomberg.
VietinBank has the equivalent of $374 million of bonds and loans outstanding, according to data compiled by Bloomberg.