Vietnamese conglomerate Vingroup plans to issue VND4 trillion ($168.4 million) worth of bonds to the public this year to fund the operations of its subsidiary, VinFast.

According to the group’s announcement of the public offering of bonds, the proceeds will be lent to the VinFast Trading and Production Joint Stock Company (VinFast) to invest in an automobile manufacturing project at the Dinh Vu - Cat Hai Economic Zone in Hai Phong city.

Vingroup will issue a total of 40 million bonds through issuing agent the SSI Securities Corporation, divided into two tranches, with tranche 1 including 20 million VICH2325004 bonds and tranche 2 20 million VICH2325005 bonds.

The par value is VND100,000 ($4.20) per bond. Vingroup will issue non-convertible corporate bonds, without warrants, unsecured, and establishing a direct debt repayment obligation of the issuer.

Tranche 1 bonds will have a term of 24 months from the issuance date. The interest rate for the first two interest periods is 14.5 per cent per annum, calculated on the basis of a 365-day year. The interest rate for subsequent interest periods is equal to the sum of 4 per cent and the reference rate, and is also calculated on the basis of a 365-day year.

Individual investors are required to buy at least VND50 million ($2,100) worth of bonds, while organizations need to buy VND500 million ($21,000) at a minimum.

Vingroup will receive bidding orders for tranche 1 from August 10 to 30 and receive deposits from August 10 to 31.