(TIỂU LUẬN) MID COURSE INTERNSHIP REPORT THE PROCESS OF CORPORATE BONDS PRINCIPAL AND INTEREST PAYMENT AT CT LAND CORPORATION

---***---MID-COURSE INTERNSHIP REPORT Major: International Finance THE PROCESS OF CORPORATE BONDS PRINCIPAL AND INTEREST PAYMENT AT CT LAND CORPORATION Student: Đinh Hà Phương Student ID

-*** -MID-COURSE INTERNSHIP REPORT

Major: International Finance

THE PROCESS OF CORPORATE BONDS PRINCIPAL AND INTEREST

PAYMENT AT CT LAND

CORPORATION

Student: Đinh Hà Phương Student ID: 1913316133 Class: K58CLC2

Supervisor: Chu Mai Linh

Ho Chi Minh City, August 2022

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has completed an internship at our organization from (DD/MM/YYYY) to………(DD/MM/YYYY) - For his/her attitude:

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CITY CAMPUS Independence - Freedom - Happiness

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(Signature with full name)

I hereby declare this report “The Process of Corporate Bonds Principal and InterestPayment at CT Land Corporation” is my own research work for the purpose ofpresenting my experiences from the mid-term internship period Except wherereference is made in the text of the report, this report contains no material publishedelsewhere No other person's work has been used without due acknowledgments inthe report.

This report has not been submitted for the award of any degree or diploma in anyother tertiary institution I shall take full responsibility for this commitment

Ho Chi Minh City, August 2022

Student

Đinh Hà Phương

This report is the result of my internship at position of Finance Intern at CT LandCorp., which is a great opportunity for me to improve my professional knowledge,gain practical experiences and attain more helpful knowledge Therefore, I amgrateful for this precious opportunity and for those who have assisted me directly orindirectly in completing the internship report.

First of all, I would like to express my gratitude and appreciation to Ms Tran KhueGiao – President of CT Land Corp for facilitating the opportunity to perform myinternship at the company In addition, I would like to thank my mentor, Ms.Nguyen Thi Minh – Finance Manager, for directly supports me with valuableinstructions and dedicated advice, which made up an important foundation for me

to build up this paper and all the members of the Finance Department for theirenthusiastic guidance and for creating good conditions for me to learn as well assharing valuable work experiences so that I can supplement my knowledge

With my endeavour to accomplish the report, I was constantly trying to gatherinformation, brainstorm ideas, and draft the outline Obviously, despite my greateffort and concentration, this report cannot be completed without any mistakes.Therefore, I want to show my most profound appreciation for my supervisor, Ms.Chu Mai Linh, who accompanied me throughout the reporting period and gave memany detailed recommendations on improving my report I wish you all the best,and I hope that I can have another chance to work with you in the future

Finally, my deepest thanks come to the teachers at Foreign Trade University – HoChi Minh City Campus for their enthusiasm and dedication to teaching and forequipping me with a good foundation of professional knowledge during the pastthree years of study

LIST OF TABLES AND FIGURES ii

PREFACE 1

CHAPTER 1: INTRODUCTION OF CT LAND CORPORATION 3

1.1 Overview of CT Land Corporation 3

1.1.1 General information of CT Land Corporation 3

1.1.2 Brief history and development of CT Land Joint Stock Company 3

1.1.3 Structure of the Finance Department at CT Land Corporation 4

1.1.5 Financial health and business outcomes of CT Land Corporation in 2018-2020 6

1.2 Summary of internship activities 9

CHAPTER 2: PROCESS OF CORPORATE BONDS PRINCIPAL AND INTEREST PAYMENT AT CT LAND CORPORATION 11

2.1 Overview of corporate bonds issuance at CT Land Corporation 11

2.2 Payment of bond principal and interest process 15

2.2.1 Before issuing bonds 15

2.2.2 When the bonds have just been issued 17

2.2.3 At interest payment period 18

2.3 Overall assessment of issuing corporate bonds procedure at CT Land Corporation 20

2.3.1 Strengths 20

2.3.2 Limitations 21

CHAPTER 3: THE OUTLOOK, RECOMMENDATIONS FOR IMPROVEMENT IN CORPORATE BONDS PRINCIPAL AND INTEREST PAYMENT PROCESS AT CT LAND CORPORATION 22

3.1 Outlook of CT Land Corporation 22

3.1.1 Opportunities 22

3.1.2 Challenges 23

LIST OF ABBREVIATIONS

LIST OF TABLES AND FIGURES LIST OF TABLES

Table 1 1 The business outcome of CT Land Corporation in 2018-2020 6

Table 1 2 Projected Revenue for the period of 2021-2025 8

Table 2 1 Information of Casablanca Bonds 14

Table 2 2 Information of Casablanca Bondholders 14

Table 2 3 Situation of using capital raised from Bonds 15

Table 2 4 Projected cash flow plan for bond principal and interest payment 16

Table 2 5 Interest paid to bondholders on the first interest payment period 20

LIST OF FIFURES Figure 1 1 Organizational structure of the Finance Department at CT Land Corporation 5

Figure 2 1 Corporate bond issuance flowchart at CT Land Corporation 12

Figure 3 1 Corporate bonds issuance in the first 6 months of 2022 23

Vietnam's bond market was formed in the 1990s and started to develop in 2000 Inthe period from 2011 to now, the bond market has developed strongly to meet thecapital mobilization requirements of the government, local authorities, policy banksand corporates

It can be said that the corporate bond market is a profitable capital mobilizationchannel for real estate corporations to develop production and business as well asconstruction of new projects In 2022, when the economy began to recover fromCOVID-19 pandemic, the demand for capital mobilization of enterprises isexpected to continue to increase However, the unsustainable growth of thecorporate bond market will affect the financial market in general and affect thecapital raising demand of businesses for the purpose of investment, development,and business expansion

Macro economy has many difficulties; Liquidity of apartment transactions has notbeen able to recover as before; Bond maturity pressure is high while capital for realestate is under strict control are the cause of poor financial health of real estateenterprises However, as one of the big companies in the real estate industry with ahistory of more than 30 years, CT Land Corporation is confident that by providingprojects serving the real needs of customers and investors, these difficulties are also

Chapter 1: Introduction to CT Land Corporation.

Chapter 2: Process of corporate bonds principal and interest payment at CT Land

Corporation

Chapter 3: The outlook, oriented development, recommendations for improvement

in corporate bonds principal and interest payment at CT Land Corporation

This report aims to show clearly how Finance Department at CT Land Corporation

deal with capital mobilization by issuing corrporate bonds through my observationduring my internship In spite of my hard work, this report cannot demonstrate andexplain in full details of the corporate bond issuance procedure in this company due

to my limited knowledge and short-time of internship, and it may contain manyinevitable errors and mistakes I look forward to receiving comments and feedbacksfrom my supervisor to make it better

CHAPTER 1: INTRODUCTION OF CT LAND

CORPORATION 1.1 Overview of CT Land Corporation

1.1.1 General information of CT Land

Corporation Legal Vietnamese name: Công ty Cổ phần Bất

động sản CT Legal English name: CT LAND

CORPORATION Abbreviated name: CTLAND

Head Office: 117 Nguyen Dinh Chieu Street, Vo Thi Sau Ward, District 3, Ho ChiMinh City, Vietnam

Business Registration Certificate No 0306240094

1.1.2 Brief history and development of CT Land Joint Stock Company

CT Land Corporation is a company belonging to CT Group Joint Stock Company,established to operate in the field of real estate Currently, CT Land is focusing on 4key real estate industries including: residential - retail - logistics - tourism

With more than 30 years of operating history and being one of the longest operatingprivate enterprises in Vietnam, CT Land has accumulated vast experiences indeveloping projects in a wide range of real estate segments including all residentialsegments (luxury, highend, mid end and affordable), supermarkets, shopping malls,offices, logistics,

CT Land has grown strongly with more than 36 member companies, 2,000employees working in many different fields, won more than 100 awards in bothdomestic and international, of which must be mentioned the First-class LaborMedal awarded by the President of Vietnam, Agoda.com's 2018 Gold CircleAwards, Dot Property Vietnam “Best Innovative Green Building”, “Best Mixed-useArchitecture Design” Award and many awards from the Government and the Press

Moving forward, CT Land aims to utilize its unique competitive advantages inaddititon to its extensive experience and capabilities to become the larrgest RealEstate Developer in Southern Vietnam with focus on Transportation Oriented andIntegrated Townships Development Following international best practices, CTLand recently adopted current IFC Corporate Governance standards Given its clearvision and dedication, CT Land's development strategy revolves around the 6golden words Culture, Speed, Technology, Globalization, Differentiation, andWestPoint.

1.1.3 Structure of the Finance Department at CT Land Corporation

Financial Force is divided into two main departments: Finance and Accounting.Due to the specific nature of the report, I only focus on Finance Department TheStructure Hierarchy Chart of Finance Department at CT Land Corp is structured asfigure 1.1 below

The diagram briefly illustrates the functions and responsibilities of each team inFinancial Deparment as well as clearly point out how each department related toother departments There are four teams in total, which are: Back Office (BO) team,Front Office (FO) team, Initial Public Offering (IPO) team and InternationalProduct Development (IPD) team In which, the Back Office will be the team thatprepares the plans, reports, statements and all the essential documents related to theproject and provides it to the Front Office Based on documents collected from the

BO team, Front Office is responsible for communicating and dealing with partnersabout business cooperation or capital raising The name of IPO team and IPD team

is also the subjects to which such team is responsible

Figure 1 1 Organizational structure of the Finance Department at CT Land

Financial IndividualIntermediates customers

Source: CT Land Corporation

1.1.4 Main products

CT land is currently developing 4 main product lines, including: CT Homes, CT

Town, CT World, CT Com Each product lines are described as folows:

CT Homes

Commercially known as "DIYAS“, is the first 4.0 technology-based housing

product line serving the affordable housing market, with the goal of solving the

hugely unmet affordable housing market demand and providing housing for yound

people

CT Town

This product line focuses on projects with land size of less than 3 hectares, located

in prime location at centers of Ho Chi Minh City’s District and along city arterial

roads such as Pham Van Dong Avenue, Ha Noi Highway, Ring Road 2 and Metro

Lines No 1 and 2

CT World

CT World is the long-term strategy product line of CT Land CT World utilizes allstrengths CT Group has built over its 30 years history to develop an ecosystems forits townships and mega townships.

CT Com

CT Com are commercial assets with diverse layout designs according to businessneeds -from scale as small as 10 m2 to 200,000 m2 in floor area CT Com offerscommercial, office, logistical spaces located on large frontage of the busycommercial and financial axes of big cities It also offer tourism projects withdesign embodies the philosophy of solidarity and harmony between people andnature

1.1.5 Financial health and business outcomes of CT Land Corporation

in 2018-2020

Table 1.1 presents the business outcomes of CT Land Corp for the period of

2018-2021 The collected data is based on the company's consolidated financialstatements in 2018-2021 Due to progess of construction and handing over tocustomers, the company's growth rate has changed significantly from year to year

Table 1 1 The business outcome of CT Land Corporation in 2018-2020

Source: Consolidated Financial Statements in 2018, 2019, 2020 of CT

of short-term receivables from sales of goods and rendering of services tocustomers

Table 1.1 has drawn the fact that 2020 is considered a challenging year for CT Land

as the company has faced a decline in revenues and profits relative to the sameperiod last year Revenue fell more than 57,6% during 2019-2020, leading to asharp decline in profit before tax, which still only recorded at VND 95,78 billion,equivalent to a decrease of 85% compared to 2019 It is largely explained by thesevere impact of the COVID-19 pandemic Overall, the whole beer industry isnegatively affected as a part of the economy Therefore, the decline in thesenumbers is entirely understandable

However, with the experience drawn from the year of 2020 and preparation ofcontingency plans, the observation of market situation and assessment of financialimpacts by the Board of Directors, the year 2021 shows a prosperity of CT Land,although not much, but still a positive signal

Debt situation

According to the Credit Information Center, as of March 2021, CT Land has nodebt at any financial or credit institutions (According to the consolidated financialstatements, CT Land has very low debt in its subsidiary companies) That provesthe sound financial management as well as financial potential for development inthe next period

Valuation of projects

CT Land is developing 80 projects, of which only 15/80 projects have been valued

at more than USD 1.27 billion by Colliers International (UK) (equivalent to morethan VND 29.265 billion)

Land bank

CT Land’s current land bank is approximately 8.875.000 m2 Land bank willexpand in the period of 2021 – 2025 Owning a large land bank is one of the proofs

of investment efficiency This will be an advantage for CT Land to quickly become

a target for domestic and foreign investors, especially in the context that "cheapcapital" flow is appearing in the market

Projected Revenue and Cash Flow for the period of 2021-2025

This projection is only based on the 20 projects mentioned below As can be seenfrom Table 1.2, projected revenue has a significant growth rate, especially from

2023 By 2025, the total projected revenue from 20 projects will reach more thanUSD 3.200 million (VND 75.000 billion), the total projected revenue from before

2021 to 2025 will reach the level of more than USD 9.000 million (VND 210.000billion) This number will increase significantly when the land bank is developedevery year

Table 1 2 Projected Revenue for the period of 2021-2025

Unit: million USD

Source: CT Land Profile, 2022

In addition to the above 20 projects, CT Land continues to develop many othernew projects, which are expected to bring in additional revenue of 5.000 –10.000 billion VND per year

Figure 1.2 Projected Cash Flow for the period of 2021-2025

Unit: million USD

Source: CT Land Profile, 2022

1.2 Summary of internship activities

My position is a Finance Intern of Financial Department, which belongs to FinanceForce My internship at CT Land JSC was set forth on March 14th, 2022 up to thepresent Over the course of four months being an intern in the Back Office ofFinance Department, I have had the opportunities to learn and experience muchnew practical knowledge from my manager and colleagues Therefore, I stood thechance to get acquainted with the work related to capital raising by issuingcorporate bonds, specially as follows:

At the beginning, I was assigned to read the legal documents related to all theprojects that have been completed and are under construction by the Company toensure that I fully understand all the key information, the legal status andconstruction progress of each project so that I can assist my manager in preparingthe loan/debt application

After that, I was trained on how to analyze financial statements and learned aboutFeasibility Study as well as key ratios in a Feasibility Study to help preparefinancial plans and fundraising plans for each project: Borrowing from domesticbanks, issuing bonds, borrowing from international funds,

I also support my team in drafting, translating documents into English (forinternational deals), arranging and packing all the necessary documents into a filefor the Front Office team to deal with partners about capital raising, including thebond issuance file

Although it is only been 4 months since my internship here, I did get exposure tothe professional working environment and understand how a bond issuanceprocedure really works, as well as have a chance to apply what I have learned in theuniversity to the process in reality Moreover, this internship also provides me thepreparing step in choosing my future careers after graduating in the next year

CHAPTER 2: PROCESS OF CORPORATE BONDS

PRINCIPAL AND INTEREST PAYMENT AT CT LAND

CORPORATION2.1 Overview of corporate bonds issuance at CT Land Corporation

Issuing bonds is considered one of the ways to help real estate businesses thosehave not yet IPO, mobilize capital to develop projects based on advantages such ashigh interest rates, short interest payment periods

To get a deep understanding of the process of paying corporate bonds’ principal andinterest, we first have to understand the corporate bonds issuance procedure at CTLand Corp Chart 2.1 demonstrates steps in the procedure of issuing corporatebonds at CT Land Corp Following the figure is my brief explanation

for the overall procedure, and at the same time I will give a practical example of thebonds issuance process to raise capital for the Léman Cap Residence projectdeveloped by Casablanca Joint Stock Company – a subsidiary of CT Land Corp.,which is also the bond issuer

The process of issuing corporate bonds at CT Land Corp is built on the basis ofLaw on Enterprises No 59/2020/QH14 and Decree No.163/2018/ND-CP aboutIssuance of Corporate Bonds and regulations as well as requirements of the Ha NoiStock Exchange, can be summarized in the chart below:

Figure 2 1 Corporate bond issuance flowchart at CT Land Corporation

- Issuer

1 + FD prepares

Issuer prepare bonds issuance

documents+ BOD approves

6 Issuer make bond principal and

- Issuer;

- FD;

7 Issuer disclose information and

- AD; report periodically until thematurity date

use rights and off the plan property, to determine the need for capital raising and themaximum level that can be raised In order to begin issuing bonds, the Issuer have

to register its business information on the HNX Then, the Issuer shall sign acontract with a securities company as a consultant to consult on the issuance planand carry out the bond issuance procedure The bond issuance plan includes keyinformations such as: Issuing purpose, Issuer information, name of the bond, bondcode, issue quantity, par value, bond type, bond term, interest rate and interestpayment period In addition, the issuer shall sign another contract with a Bank tomanage the bond account.

After completing the bond issuance documents, the issuer shall disclose informationbefore the issuance to the investors register to buy bonds and send the information tothe HNX at least 03 working days before the expected issuing date After selling thebonds to the market, the Issuer and Investors who buy bonds will sign a bond sale andpurchase contracts, Investors then make deposits and make payment to the issuer TheIssuer once again disclose information about the bond issuance results to bondholdersand report the results to the HNX within 05 working days from the end of the bondissuance After the information is published on the information page of HNX aboutcorporate bonds, the securities company – securities depository center will issue thebond ownership certificates to the bondholders

On the date of periodic payment, the Issuer makes principal and interest payments

to the bondholders, after which continue to disclose information and periodicallyreport on the use of capital raised since the day the bonds are completed issued untilthe maturity date so that HNX can monitor and control the bond situation

The bond issuance procedure for the Léman Cap Residence project will be given as

a practical example Before issuing bonds, Casablanca JSC signed a contract withVietnam Assessment and Evaluation Assets JSC - Ho Chi Minh branch (VAAE) toappraise the LCR project, with a valuation result of VND 598.909.000.000 Based

on this value, Casablanca JSC determined the amount of capital to raise is VND

240 million and raise through issuing corporate bonds Casablanca JSC signed aBond issuance advisory and underwriting agency Contract and Registration,depository, payment and management of bond transfer Agency Contract with BaoViet Securities Joint Stock Company – Ho Chi Minh City branch, at the same timesigned Contract of bond account and bond repayment provision account