HoREA: Bond repayment pressure in 2024 will reach a three-year high

Next year, the value of maturing corporate bonds could reach VND329,500 billion, the highest in the past three years, according to HoREA.

According to recent statistics from the Ho Chi Minh City Real Estate Association (HoREA), the total value of corporate bonds maturing in 2024 will reach VND329,500 billion. Meanwhile, this figure was VND144,500 billion last year and VND271,400 billion this year.

In the immediate future, the pressure to repay corporate bonds is also very high. According to HoREA, the fourth quarter is the peak period for bond maturity this year with a total value of up to VND65,500 billion (excluding the extended and postponed bonds). Nearly 80% are real estate corporate bonds.

According to the Vietnam Bond Market Association (VBMA), in the last two months of the year, it is estimated that more than VND41,000 billion worth of bonds matured. Of these, 16 bonds were late in paying interest and principal with a total value of more than VND1,000 billion and 47 bonds had their interest rates extended or changed.

The pressure to repay bonds is great while many businesses are facing capital shortages and business difficulties. Since August, the value of early bond buybacks has always been lower than the bond maturity value.

Recently, businesses have chosen to focus on negotiating to extend the time instead of buying back maturing bonds. According to VBMA, in October, businesses bought back VND13,645 billion, down 17.4% compared to the same period in 2022.

As for the bond term extension agreement, more than 60 issuers have successfully implemented it and reported it to the Hanoi Stock Exchange (HNX) as of October 27. According to VNDirect, the total value of the above-mentioned extended corporate bonds is about VND107,000 billion.

Recently, the Ministry of Finance has requested that enterprises with outstanding bond debt be responsible for their debt repayment obligations and make efforts to balance cash flow to arrange timely payments. Companies facing difficulties can use Decree 08 to implement options such as negotiating with investors to swap debt with legal assets or negotiating changes to the terms and conditions of the bond. In the case of bond extension, the maximum period is not more than two years.

Siddhartha

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