Vietnam Techcombank breaks record with the closing of a USD 1 bn offshore syndicated loan facility

(SGI) - Vietnam Technological and Commercial Joint Stock Bank (Techcombank) has successfully concluded a landmark USD 1 billion syndicated loan facility (the “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 Facility marks Techcombank’s third approach to the offshore loan syndication market, following its inaugural USD 500 million transaction in 2020 and a highly successful USD 800 million financing completed last year.
Vietnam Techcombank breaks record with the closing of a USD 1 bn offshore syndicated loan facility

The fully underwritten financing was selectively launched in late December last year at an original target size of USD 700 million with a pre-funding option, and subsequently offered to the wider market in February 2022. Owing to stellar market response, the facility amount was upsized to USD 1 billion. The Facility comprised three tranches with tenors of 3, 4 and 5 years. The 5-year tranche followed the successful precedent set earlier by Techcombank in its USD 800 million deal.

The Facility offered an interest margin of 140 basis points on the 3-year loan, 155 basis points on the 4-year loan, and 170 basis points on the 5-year loan, over Compounded SOFR, which was itself a benchmark pricing by a Vietnamese bank in the offshore syndicated loan market. The loan proceeds, which are for general corporate and working capital purposes, 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.

Techcombank’s exemplary track record and robust business strategy have enabled it to access a large pool of liquidity from a diverse range of investors. A total of 26 prestigious international banks - headquartered in Australia, China, France, India, Indonesia, Japan, Singapore, Taiwan and United Kingdom - joined this landmark transaction. The outstanding success of the transaction in terms of size, tenor and participation reaffirmed the pioneering position of Techcombank in the Vietnamese banking sector.

Standard Chartered Bank and United Overseas Bank Limited (“UOB”) initially underwrote the financing and were joined by fellow Mandated Lead Arrangers, Underwriters and Bookrunners, namely Australia and New Zealand Banking Group Limited, The Hongkong and Shanghai Banking Corporation Limited, and Sumitomo Mitsui Banking Corporation. Meanwhile, P.T. Bank Negara Indonesia (Persero) Tbk, CTBC Bank Co., Ltd., State Bank of India, and Taipei Fubon Commercial Bank Co., Ltd. came in as Mandated Lead Arrangers and Bookrunners.

Mr. Bryan Liew, Head of Leverage and Acquisition Finance Syndicate of Standard Chartered Bank, said: “Once again, Techcombank has set the bar for the Vietnamese loan market, with an eye-catching USD 1 billion transaction. The wide representation of banks across tenors attests the market’s belief in this credit and confidence in its medium and long-term prospects. We, along with our Commercial, Corporate and Institutional Banking team, Standard Chartered Vietnam, are delighted to lead this landmark transaction, once again.”

Ms. Lim Lay Wah, Head of the Global Financial Institutions Group of UOB, said: “Techcombank continues to set new milestones in offshore fund raising, following its inaugural transaction in 2020. With the latest loan, Techcombank is pioneering the market for USD SOFR borrowings. UOB is excited to be part of Techcombank’s business growth and we look forward to forging a long-term partnership to mark new milestones together.”

Mr. Alex Macaire, Group Chief Financial Officer of Techcombank, said: “We are delighted to have successfully accessed the international syndicated loan market with new records for a third year in a row. To achieve this milestone in the current challenging environment is a testament to the confidence and trust international investors have in Techcombank and the Vietnamese economy after conducting thorough due diligence. On behalf of Techcombank, I would like to thank all the banks involved for their strong commitment and support, which will help us to continue to deliver our growth strategy and provide outstanding services to our growing customer base.”

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