(CLO) Maturity pressure is always an existing risk for the corporate bond market when the number of corporate bonds maturing and overdue in the fourth quarter of 2024 and 2025 is still high.
Debt repayment pressure of real estate businesses remains high
At the Real Estate Forum “For the market to return and develop” held on November 16, Dr. Vu Dinh Anh, an economic expert, said: After a difficult period, the corporate bond market has gradually recovered since the beginning of the year.
However, the pressure to mature bonds, especially corporate bonds, remains a challenge for the market.
Citing statistics from FiinRatings, Dr. Vu Dinh Anh said: The balance of corporate bonds (both principal and interest) due in 2024 will be at VND315,000 billion and will peak at VND334,000 billion in 2025.
Overview of the Forum. (Photo: ST)
As for real estate bonds, the balance due in 2024 is currently at VND60,000 billion and in 2025 is estimated at VND135,000 billion.
“Maturity pressure is always an existing risk for the corporate bond market when corporate bonds maturing and overdue in the fourth quarter of 2024 and 2025 are still high; in which, bonds of real estate enterprises have a higher risk of overdue and potential bad debt than the market average,” Mr. Anh said.
Speaking at the workshop "Developing the corporate bond market towards professionalism and sustainability", Mr. Nguyen Quang Thuan, General Director of FiinRatings, emphasized the huge problem of overdue debt in 2024 - 2025.
Mr. Nguyen Quang Thuan noted that the largest source of money is not bank loans or bonds but money received from customers, which means that surrounding support is also very important, we should not only focus on rescuing bonds, surrounding measures are much more important, which is "clean" legality.
“What we can do is to involve the Government's project on solving real estate legal problems. Once this problem is solved, handling overdue debt will be very easy,” said Mr. Nguyen Quang Thuan.
60% of businesses have extended for 2 years
Also at the forum, Dr. Can Van Luc said that the story of real estate corporate bond maturity has overcome the most difficult period (June - August 2023) since Decree 08/2023/ND-CP allowing negotiations to extend and postpone debt.
Dr. Can Van Luc, economic expert. (Photo: ST)
According to Dr. Can Van Luc, basically, 60% of enterprises have extended their bonds for 2 years (peak in June 2025), enterprises have proactively bought back bonds according to the issuance conditions and started issuing again to reduce capital pressure. In addition, the real estate market is warming up, enterprises are willing to sell assets to set aside a portion to pay off debts.
Therefore, Dr. Can Van Luc assessed that the phenomenon of bankruptcy is unlikely to happen because the most difficult time has passed, and there are many synchronous solutions to solve it. In fact, real estate businesses do not need to discount products by 40-50% like before, discounting about 10% has already sold.
The fact that Decree 08/2023/ND-CP has expired raises the question of whether Decree 65/2022/ND-CP allows for debt negotiation, extension, or deferral. “This is something that the management agency needs to clarify,” said Dr. Can Van Luc.
The application of Decree 65/2022/ND-CP with stricter regulations demonstrates the management agency's efforts to clean up the market, but also leads to concerns about creating barriers to private issuance of corporate bonds; while the legal corridor for public bond issuance has not been shortened or cleared, it will continue to lead to congestion of the corporate bond channel.
Explaining this issue, Ms. Tran Kim Dung, Deputy Director of the Securities Offering Management Department, State Securities Commission, said that at the time when Decree 65/2022/ND-CP was issued, the bond market was tightening, so the Government issued Decree 08/2023/ND-CP to remove some difficulties for businesses such as negotiating, extending debt for bondholders, postponing conditions for professional securities investors, and credit ratings.
“Currently, Decree 08/2023/ND-CP has expired, so the time for the Government to loosen the issuance of individual corporate bonds is temporarily postponed. Whether or not the amendment of Decree 65/2022/ND-CP will continue to open up for negotiations or not, we still have to wait for the opinion of the Ministry of Finance,” Ms. Tran Kim Dung informed.
Mr. Pham Van Hieu, Deputy Head of the Financial Market Department, Department of Banking and Finance, Ministry of Finance added that Decree 08/2023/ND-CP has 2 amendments and 1 suspension. The suspension is the regulation on determining professional investors, bond distribution time and credit rating, the suspension period is until December 31, 2023.
“The Ministry of Finance has reported to the Government on the implementation status. Currently, according to the Government's viewpoint, some provisions that have expired in Decree 08/2023/ND-CP will be implemented under Decree 65/2022/ND-CP from January 1, 2024,” said Mr. Pham Van Hieu.
Regarding the two amendments to Decree 08/2023/ND-CP, Mr. Pham Van Hieu said that he will continue to implement the spirit of the Decree. Regarding the study of amending Decree 65/2022/ND-CP, the Ministry of Finance is reviewing and amending a number of articles of the Securities Law. After that, closely following the Securities Law to amend Decree 65/2022/ND-CP.
Source: https://www.congluan.vn/ap-luc-tra-no-trai-phieu-cua-cac-doanh-nghiep-bat-dong-san-den-nam-2025-van-con-cao-post321645.html
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