Phu My Hung sold entire batch of $1.7-trillion corporate bonds to IFC

IFC, a member of the World Bank Group, is subscribing to a VND1.7 trillion (approximately $75 million) bond issued by local real estate developer Phu My Hung Development Corporation.

The proceeds will accordingly be primarily used to develop an integrated township in rural Hoa Binh province over the next 15-20 years.

According to Phu My Hung, the C-bond issued is non-convertible with a maturity date of June 15, 2026 and a coupon rate of 8.17 per cent.

“With this investment, we are now well-positioned to focus on developing new integrated townships in a number of secondary provinces, starting with Phu Hung Khang township, as part of a sustainable growth model,” said Gary Tseng, CEO of Phu My Hung. 

Rurally located with limited transportation infrastructure 60 kilometers west of Hanoi, the Phu Hung Khang township will  provide over 1,000 new homes, two schools, and a hospital upon its completion. A 75-room hotel will also be built to tap into the area’s tourism potential.

The project is also expected to create more than 1,000 jobs for local communities, including ethnic minorities, providing opportunities to diversify income sources in addition to agriculture.

To promote sustainable urbanisation, IFC will support the company to adopt environmental and social best practices, including community development and livelihood restoration. The project will also apply IFC’s Excellence in Design for Greater Efficiencies (EDGE) green building certification system to reduce consumption of energy, water, and embodied energy in materials by at least 20 percent compared to similar housing projects.

“This investment will deliver quality and climate-friendly accommodation to people working in and around Hanoi, thus easing the pressure on the fast-growing capital, and provide jobs and income for local communities,” said Kyle Kelhofer, IFC country manager for Vietnam, Cambodia, and Lao PDR. “IFC’s financing for one of the first multi-phase projects in a secondary province showcases IFC’s catalytic role in promoting private sector participation in rural development and inclusive growth.”

“Longer term, we see this as an opportunity to develop a strategic relationship with IFC to set higher market standards as the Vietnamese real estate sector continues to evolve,” said Tseng

In August, Phu My Hung also issued an intermediate-term bond of seven years, worth VND300 billion ($13.04 million), with a coupon rate of 8.8 per cent.

The property developer used its land use rights of the M1 and M4 lots, which cover a total area of ​​nearly 40,000 square metres in the Phu My Hung Urban Area in District 7, Ho Chi Minh City, as the guarantee for such bond issuance.

Earlier on, Phu My Hung mortgaged its land use rights and properties attached to the land at the CR5-1B lots, located in the Phu My Hung Urban Area, to Standard Chartered Bank.

The UK-based bank also accepted other assets from the property developer as collaterals, including its rental agreements for the retail area, serviced apartments and office at the Crescent Residence 2 and Water Front projects.

The total value of these collaterals has amounted to over VND955 billion (more than $41 million).

In August 2018, Phu Hung Khang, a subsidiary of Phu My Hung, also signed a loan agreement worth $400 million with a consortium of banks from Taiwan, China and Hong Kong, led by Mega International Commercial Bank and Taipei Fubon Bank.

Phu My Hung Development Corporation was established in 1993 as a joint-venture between Tan Thuan Industrial Promotion Company and Taiwanese-backed Central Trading and Development Group.

Phu My Hung Development Company, formerly Phu My Hung Joint Venture, was established by Tan Thuan Industrial Development Company and Central Group Trading & Development of Taiwan, China.