CII Bond Raise: 6.92 Trillion VND in October Issues at 11.5% Coupon

Overview

Ho Chi Minh City Infrastructure Investment JSC (HOSE: CII) has announced a 200 billion VND private placement of secured, non-convertible bonds carrying an 11.5% fixed coupon for the first four interest periods, with issuance targeted for October 2026. The new tranche sits alongside a convertible bond issue of nearly 6.72 trillion VND open to existing shareholders, bringing total planned October debt mobilization to about 6.92 trillion VND. The scale of the fundraising underscores how far CII’s financing mix has shifted toward the corporate bond channel.

Key Facts

• New issue: 200 billion VND, proposed code CIIL12601, two-year tenor, non-convertible, no warrants, secured and not subordinated.
• Coupon: fixed at 11.5% per annum for the first four quarterly periods, then floating at a reference rate plus 4.8% per annum, with a floor of 11% per annum.
• Convertible tranche: CII426001, approximately 6.72 trillion VND, offered to existing shareholders at 10% (1 bond per 10 shares), subscription and payment from 10 September to 9 October.
• Convertible terms: 25-year tenor, no interest for the first 12 periods (three years), then 14.5% per annum for remaining periods.
• Collateral: a 215 billion VND capital contribution in CII Cong Tu Partner LLC plus nearly 19 million CEE shares held by a subsidiary.
• Bond debt outstanding reached a record 7,888 billion VND by face value as of 30 September, of which 3,323 billion VND is non-convertible and 4,565 billion VND convertible.
• Book borrowings from bonds were 6,582 billion VND at end-June 2026, or 23.7% of total financial borrowings of 27,792 billion VND, up from 14.5% at end-2023.

What Happened

CII disclosed the plan for a 200 billion VND private placement of corporate bonds, provisionally coded CIIL12601, according to a company announcement. The bonds are unsecured by conversion rights or warrants, carry a two-year term, and are intended to be issued within October so proceeds can repay loans owed to VietinBank in the fourth quarter of 2026 and the first quarter of 2027. The fixed 11.5% coupon applies for the first four interest periods, each calculated on a three-month cycle, after which the rate floats at a reference rate plus 4.8% per annum but no lower than 11% per annum. Security comprises a 215 billion VND capital contribution in CII Cong Tu Partner LLC and roughly 19 million CEE shares owned by a subsidiary.

The placement follows a much larger convertible bond, CII426001, which targets nearly 6.72 trillion VND and is being offered to existing shareholders at a 10% ratio, with registration and payment running from 10 September to 9 October. That tranche has a 25-year tenor, pays no interest for the first 12 periods, and then applies a 14.5% coupon. The company has yet to report the results of that earlier issue, and the filing does not disclose the final allocation or take-up of either tranche.

Market Context

CII closed at 11,950 VND on 9 October 2026 on HOSE. The company operates in infrastructure and real estate, sectors where long-dated debt is common but where reliance on bond issuance has drawn scrutiny since the 2022-2023 credit tightening. Bond debt has expanded 2.4x in two and a half years, from 2,744 billion VND at end-2023 to 7,888 billion VND by face value at 30 September, while the bond share of total financial borrowings rose from 14.5% to 23.7%. The convertible structure, with a three-year interest holiday and a 14.5% back-end coupon, is priced well above prevailing bank deposit rates, a signal of the yield CII must offer to place long-dated paper.

Strategic Significance

The strategic question for long-term holders is whether CII can convert expensive, long-dated bond liabilities into cash-generating infrastructure assets before refinancing pressure builds. The 25-year convertible with a three-year interest holiday defers cash coupon outflows but concentrates a step-up to 14.5% later, while the short two-year secured tranche at 11.5% is explicitly earmarked for VietinBank repayment, effectively rolling bank debt into bond debt. The pledge of CEE shares as collateral links CII’s funding capacity to the market value of its listed subsidiary, adding a cross-holding dimension to the credit story. Rising bond dependence also raises sensitivity to refinancing conditions and to any tightening in the private placement market.

What to Watch

• Results of the CII426001 convertible subscription, including take-up and final proceeds, due after 9 October 2026.
• Completion and listing details of the CIIL12601 200 billion VND tranche, including actual coupon fixing and collateral registration.
• Q3 2026 financial statements, for updated bond debt, cash flow and the ratio of bond borrowings to total financial debt.
• Any change in the market value of the pledged CEE shares and the status of the 215 billion VND capital contribution used as collateral.
• VietinBank loan repayment confirmation in Q4 2026 and Q1 2027, and any further bond issuance announcements.