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Mirae adds to Vietnam loan momentum

By Pan Yue
21 Jul 2021

The Vietnam consumer finance subsidiary of Korea’s Mirae Asset Financial Group has become the latest firm to join a flurry of Vietnamese financial institutions in the loan market.

Mizuho is the sole mandated lead arranger and bookrunner for the $50m transaction, according to a banker who received the invitation letter.

It is the second borrowing from Mirae Asset Finance Co (Vietnam), after it raised a $50m two-year deal in May last year. Mizuho was also the bookrunner at the time, but only Kexim Asia joined as a lender, according to Dealogic.

Mirae has changed around the structure of its new deal, adding a one year tranche. The loan is split between a two-year tranche A that pays 155bp over Libor as margin, and a tranche ‘B’, which has a tenor of one year with a one year extension option. This portion pays a higher margin of 300bp.

The invitation letter did not offer information for the rationale behind this arrangement. Both tranches are guaranteed by Mirae Asset Capital.

Neither Mizuho nor Mirae Vietnam could be reached for comment by the time of writing.

The fees are the same for two tranches. Lenders committing $20m and above receive a 25bp fee, those committing $10m to $20m earn a 20bp fee, and those chipping in below $10m receive a 15bp fee.

Based on a bullet repayment structure for both tranches, tranche ‘A’ pays all-ins of 167.5bp, 165bp and 162.5bp, respectively, while ‘B’ offers 325bp, 320bp and 315bp respectively.  

The deadline for commitments is August 27.

Mirae Vietnam’s loan follows a spate of transactions from a handful of other Vietnamese financial institutions. For instance, Vietnam Joint Stock Commercial Bank for Industry and Trade (VietinBank) is seeking a $790m facility, VP Bank Finance is wooing banks for $200m, and Home Credit Vietnam is raising a $100m deal.

The banker added that her firm is interested in Vietnamese FIs in general given their positive views on Vietnam’s economy. But she said that the challenge for Mirae will come from lenders’ unfamiliarity with the name, and its small business size.

“The two biggest consumer finance companies from the country are Home Credit and VPBank Finance,” she added. “Mirae is relatively small, which is our concern. The strong background [as its parent is Korea’s Mirae Asset] will give us some comfort, but the borrower is still a new name. It’s not easy,” she said.

Mirae Asset is a financial services company offering services around asset management, investment banking, wealth management and life insurance.

By Pan Yue
21 Jul 2021