Corporate bond issuance soars

According to the Ministry of Finance 's June report, out of a total of VND 110.2 trillion in privately issued corporate bonds since the beginning of the year, credit institutions accounted for 63.2% with VND 69.6 trillion. Real estate businesses accounted for 28.6%, with VND 31.5 trillion.

In terms of investor structure, institutional buyers of corporate bonds in the primary market accounted for 94.8% of the issuance volume, concentrated in credit institutions (53.5%) and securities companies (21.9%). The remaining 5.2% was purchased by individual investors.

According to the report, the issuances had an average interest rate of 7.41% per year and an average maturity of 3.78 years. In addition, 14.5% of the issued bonds currently have collateral.

However, the situation regarding the fulfillment of financial obligations to bondholders by businesses remains unfavorable. According to a report by the Ministry of Finance, issuers repurchased approximately 59,800 trillion VND of bonds in the first half of the year, a decrease of 39% compared to the same period in 2023.

Previously, a report by credit rating company VIS Ratings also showed that the rate of late payment in the whole market by the end of May was 16.1%, an increase of 1% compared to the end of 2023. This unit estimated that about 30% of the bonds maturing in June were highly likely to default on the principal debt due. Of which, most of the bonds had previously delayed interest payments.

Faced with continued high repayment pressure, many businesses are actively negotiating with bondholders to request debt deferrals. VNDirect estimates that as of May 29th, the market has seen more than 90 issuers reach agreements to extend bond maturities, with a total extended value of over 144,000 billion VND.

Additionally, some choose to swap bonds for other assets, a common practice among real estate companies being to pay with real estate. Companies also negotiate with bondholders to reduce interest rates and extend interest payment periods.

Not only for businesses that have been late in paying, payment pressure is still present for businesses. According to statistics from the Vietnam Bond Market Association (VBMA), in the second half of 2024, it is estimated that there will be nearly VND 140,000 billion of bonds maturing, most of which are real estate with nearly VND 59,000 billion, accounting for 42%.

In the coming period, the Ministry of Finance stated that it will continue to monitor the situation in the corporate bond market, especially macroeconomic management policies and the recovery of the real estate market.

According to this agency, along with appropriate credit growth, measures to ensure transparency and improve the quality of corporate bonds will support the market's self-regulation, prevent policy abuse, and promote safer and more sustainable development.

At the same time, the authorities will improve legal regulations, research policies to encourage credit ratings, roadmaps to upgrade the stock market, and develop a system of institutional investors. They also plan to increase resources and personnel for the inspection and supervision agencies of the State Securities Commission and the State Bank.

TB (according to VnExpress)

Source: https://baohaiduong.vn/phat-hanh-trai-phieu-doanh-nghiep-tang-vot-386667.html