Ho Chi Minh city Infrastructure Investment Joint Stock Company respectfully informs to the Shareholders:
- Strategic Vision for CII Infrastructure Investment
As CII’s shareholders have been previously informed in our 5-year report, 2017-2022 “5 Years Reflection – Future Progression”, CII’s investment strategy is to focus on large-scale infrastructure projects that play strategic roles in the economic development of Vietnam.
After these projects are put into operation, CII will securitize future cash flows to quickly recover capital for reinvestment in new projects as well as dividend payments to shareholders.
Therefore, the company aims to issue long-term bonds to institutions such as insurance companies and pension funds domestically and internationally to mobilize large amounts of capital, in accordance with these institutions’ long-term investment strategy.
- Principle Agreement Reached with GuarantCo:
With the aforementioned strategic vision, CII has recently approached a number of insurance companies and pension funds. CII recognizes that these investors often invest in companies with high credit ratings or in financial instruments guaranteed by international credit guarantors.
Therefore, over the past year, CII has been in contact with and worked with highly accredited international guarantees, such as GuarantCo and CGIF, in order to persuade them to provide guaranty for the payments of the corporate bonds CII intends to issue.
After many of our diligent efforts to prove CII’s ability to meet the financial obligations of issuing corporate bonds, the company is pleased to announce today that, on 9 November, 2018, CII received an official statement from GuarantCo on the acceptance to guarantee the bond that will be issued by CII.
Approval from GuarantCo was a huge success for CII, which once again reemphasize:
- CII’s competency in order to work with major international financial institutions such as Goldman Sachs, Ayala, MPTC, Rhinos, and most recently GuarantCo;
- Creditworthiness of CII in all types of financial products (bonds, credit loans, etc.) has been significantly improved, allowing the company to raise more capital in the near future;
- Opportunities for CII to raise long-term capital for investment in infrastructure projects at a low cost of capital;
- Opportunities for CII to continue working with other major financial institutions such as CGIF, ADB, IFC, and the World Bank.
- Bond Issued:
The company is currently in the process of negotiating the terms and conditions of GuarantCo’s bond guarantees. Some basic provisions of the approval include:
- Total expected value of issuance: 1.150 billion VND
- Total value guaranteed by GuarantCo: 100% of the issued value
- Currency issued: Vietnam dong
- Estimated interest rate: about 7% / year (excluding guarantee fee, issuance fee, and other fees)
- Guarantee period: maximum of 10 years. When the bonds are issued successfully, CII will be one of the few private companies in Vietnam to issue bonds with a 10-year maturity.
- About Guarantco:
GuarantCo mobilises private sector local currency investment for infrastructure projects and supports the development of financial markets in lower income countries across Africa and Asia. GuarantCo is part of the Private Infrastructure Development Group (PIDG) and is funded by the governments of the United Kingdom, Switzerland, Australia and Sweden, through PIDG, and the Netherlands, through FMO. GuarantCo is rated AA- by Fitch and A1 by Moody’s. www.guarantco.com
- About PIDG:
The Private Infrastructure Development Group (PIDG) encourages and mobilises private investment in infrastructure in the frontier markets of sub-Saharan Africa, south and south-east Asia, to help promote economic development and combat poverty. Since 2002, PIDG has mobilised $33.7bn from private sector investors and DFIs, supported 170 infrastructure projects to financial close and provided 231 million people with access to new or improved infrastructure. PIDG is funded by donors from six countries (UK, Switzerland, Australia, Sweden, the Netherlands and Germany) and the IFC. www.pidg.org