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BIWASE Long An issues Vietnam's first AAA-rated bonds worth $27.6 million
Binh Duong Water and Environment JSC (BIWASE) and its subsidiary, BIWASE Long An, issued Vietnam’s first corporate bonds to receive the prestigious AAA credit rating in December.
The first batch of the AAA-rated bonds has a total value of VND700 billion ($27.6 million) with a fixed interest rate of 5.5 per cent per year and a ten-year term, guaranteed by the Credit Guarantee and Investment Facility (CGIF). Maybank Investment Bank was the sole arranger, while FiinRatings was the local credit rating agency for the bond.
The issuer is a subsidiary of BIWASE, the third-largest clean water supply company in Vietnam by capacity, generating approximately 822,000 cubic metres per day. The proceeds of the bond will finance the issuer’s growth plans to increase its capacity by up to an additional 60,000 cu.m per day at its existing water treatment plant in Long An.
The bond is a breakthrough for Vietnam’s bond market. Rated AAA by FiinRatings, it is Vietnam’s first ever AAA-rated corporate bond. With a ten-year tenor, it is CGIF’s first long-dated transaction and first infrastructure funding in Vietnam in the post pandemic era, further entrenching CGIF’s position as a catalyst of long-term bonds in Vietnam and ASEAN. Ultimately, the bond underscores the viability of local currency bonds in funding ASEAN infrastructure projects, one of CGIF’s core mandates.
Nguyen Van Thien, chairman of BIWASE, stated, “We are immensely proud to announce the successful issuance of our first AAA-rated bond. This achievement marks a significant milestone for BIWASE Long An and Vietnam’s bond market. BIWASE Long An plays a pivotal role in BIWASE’s strategic development in Long An province, and this success will serve as a strong foundation for BIWASE to execute its future investment and growth plans."
He further noted that BIWASE believes that this bond issuance will pave the way for future financing opportunities in the water sector and attract more investments into critical infrastructure projects, both for the industry and for BIWASE. The proceeds from this bond issuance will enable BIWASE Long An to expand its water treatment capacity by an additional 60,000 cu.m per day at its Long An facility. This expansion is a crucial component of BIWASE’s strategy to meet the growing demand for clean water in the region.
Hongwei Wang, CEO of CGIF, stated, “With its role to guarantee the bond, CGIF has boosted the confidence of investors in AAA-rated bonds. This transaction has reiterated CGIF's commitment to the development of the bond market. It also increases public access to clean water - an indispensable service. This is a landmark not only for BIWASE Long An, but also for our goal of bond development in the region.”
Kim Thien Quang, CEO of Maybank Investment Bank, added, “This bond issuance demonstrates the strength and resilience of Vietnam’s bond market and highlights the potential of local businesses to access innovative financing solutions. At Maybank Securities Vietnam, we are privileged to have worked closely with BIWASE Long An to bring this transaction to fruition. This project reflects our deep understanding of the local market, our ability to tailor financial solutions to the unique needs of our clients, and our unwavering commitment to advancing Vietnam’s capital market ecosystem.”
VIR
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