“Are you risking your funds in a Vietnam term deposit? You shouldn’t!”
That’s what Lawrence Young from Holborn Assets Ltd– a leading global financial services company – wrote about investing in Vietnam as an expat. Vietnam Insider reports.
According to Lawrence, term deposit in Vietnam are extremely high risk as the Deposit Insurance Scheme here in Vietnam only covers you for the paltry amount of 75 million VND. (circa 3,200 USD).
Why risk losing all of your savings in a loosely regulated market where numerous banks have folded and gone into liquidation in recent years?
It is possible to beat interest rates offered in Vietnam rather convincingly elsewhere (10 to 12% through the Loan Note being discussed below), while also having your funds secured in a financial jurisdiction that is better regulated. In this case, the United Kingdom. The Financial Conduct Authority (“FCA”) is arguably one of the strongest regulatory authorities in the world.
The Loan Note in question deals in land acquisition for the likes of McDonalds, Starbucks, KFC, Costa Coffee, Burger King and many more of the better known high street brands. Once planning permissions have been granted, these corporations then enter into long term lease agreements securing a rental income of between 25 and 30 years. This known income is how income is generated to return to underlying investors their semi annual interest payments (coupon interest payments).
The underlying investors are offered security in the same way as a bank loan by having first rights or legal charge through an assigned Trustee on any cash at bank held, land acquisitions, planning permission rights, and any other assets that the Loan Note may acquire.
The Loan Note is number 7 since 2003 that has been released and is a round of funding of 20 million GBP. 4 million additional funding comes from the Loan Note providers themselves so they do have “skin in the game”. 24 million GBP in total funding.
It is a two year Loan note which offers a semi-annual interest payment of 5% (5% paid every 6 months so a total of 20% over the 2 year period) + your principal returned on its maturity date at the end of the 2 years. Or you can defer the interest payment and receive just one payment at the maturity date at the end of the 2 years at a higher rate of 24%. Plus your principal investment amount returned on maturity at the end of the 2 years.
This is an annualized rate of 10% per annum or 12% per annum as you choose. Beating as suggested rather handsomely any deposit interest rate being offered in Vietnam.
Lawrence summarized on Vietnam Insider:
- Short term investment opportunity of 2 years.
- Loan note terms of two years with income and deferred interest options
- Minimum investment of £25,000 or currency equivalent
- Interest earned will be 10% or 12% per annum gross dependent on type of loan note chosen
- Secured with a first legal charge over properties/land purchased and a fixed and floating charge
- Two share classes are available in GBP and USD
- Security Trustee appointed to represent the interests of the loan note holders
“Currently 15.2 million GBP of funding has been raised globally. 3.1 million GBP coming from Vietnam investors” Lawrence wrote.
To be advised in detail, you can get in touch directly with Lawrence at Lawrence.young@holbornassets.com.
Lawrence Young, The Author