Jamie

HANOI, Oct 4 (Reuters) - The Asia Commercial Bank, Vietnam's fifth-largest bank by assets, said on Wednesday it would raise 1.65 trillion dong ($103 million) through the issue of convertible bonds this month to boost its financial strength.

The five-year bonds would be issued on Oct. 16, the unlisted bank said in a statement, citing central bank approval last week.

ACB has said it hopes to make its domestic stock market <.VNI> debut before the end of the year after last month receiving central bank permission for a listing.

The Ho Chi Minh City-based bank said it will sell a total of 1.65 million bonds at a face value of 1 million dong ($62.3) each to shareholders who register by next Monday (Oct. 9).

The debt will carry a fixed annual coupon of 8 percent.

In August, ACB General Director Ly Xuan Hai said proceeds from the issue will enable ACB to provide various financial services by 2011 while raising the bank's capital adequacy ratio -- which has been reduced to 9 percent in August from 12.6 percent at the start of the year.

ACB has projected to boost assets by 13.8 percent to 41 trillion dong by the year-end, from around 36 trillion dong now.

The October issue is the first phase of a plan aimed at raising a total of 3 trillion dong ($187 million), with the remaining debt to be sold in 2007, the bank said in August.

The bank has said bonds worth 1.1 trillion dong will be converted into shares in 2007, while the share conversion of the remaining debt issued in 2006 and 2007 will take place in 2008.

ACB has the largest assets among more than 30 part-private banks in Vietnam, but ranks fifth after four state-run commercial banks. ($1=16,012 dong)

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Vietnam will also add several more companies to the stock exchange. They include this Asia Commercial Bank (ACB), SMC Investment and Trading Company (steel), Dong Nai Roof Sheet and Construction Material Co (Construction materials).

As a note, since the end of 2005 Vietnam's stock market has gained 76.2%, which is the highest gain in the world.

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