The Vietnam Asset Management Company (VAMC) on October 1 purchased over VND2.5 trillion (US$117.5 million) of bad debt from the Bank for Agriculture and Rural Development (Agribank) for roughly VND1.7 trillion (US$80 million) in special bonds.

According to the VAMC, the purchased debt consisted of 27 loans made to 11 of Agribank’s business customers.

Agribank will use the VAMC’s special bonds to acquire refinancing loans from the State Bank of Vietnam with a maximum refinancing rate equivalent to 70% of the bonds’ face value.

Agribank is the first credit institution to sell bad debt to the VAMC. The debt trading firm is expected to conduct further transactions this week with Saigon Commercial Bank (SCB), Saigon Hanoi Bank (SHB) and Petrolimex Group Commercial Joint Stock Bank (PG Bank).

The VAMC plans to issue VND10 trillion (US$470 million) worth of special bonds in October to buy up bad debt from credit institutions.

Source: Nhandan.org.vn