Corporate bond market “quiet” in September

ANTD.VN - There has been no recorded corporate bond issuance in September until September 15, while VND2,225 billion worth of bonds have been bought back by businesses before maturity.

According to data from the Vietnam Bond Market Association (VBMA), as of September 15, 2023, the corporate bond market has not had any issuances in September.

Meanwhile, in August, there were 30 separate issuances with a total value of VND30,657 billion. These issuances had an average interest rate of 9.02%/year, with terms mainly ranging from 2-5 years.

Accumulated from the beginning of the year until now, the total value of corporate bond issuance is recorded at VND 140,417 billion, with 17 public issuances worth VND 16,476 billion (accounting for 11.73% of the total issuance value) and 113 private issuances worth VND 123,941 billion (accounting for 88.27% of the total).

Các doanh nghiệp chưa có đợt phát hành mới nào trong nửa đầu tháng 9 ảnh 1

Businesses have not had any new issuances in the first half of September.

While issuances were quiet, businesses continued to buy back bonds before maturity, with VND2,225 billion of corporate bonds bought back in September 2023 as of mid-month. The total value of corporate bonds bought back by businesses before maturity accumulated since the beginning of the year to date reached VND69,840 billion (up 20% over the same period in 2022).

Banking is the leading industry group in terms of repurchase value, accounting for 51.7% of the total early repurchase value (equivalent to VND 87,838 billion).

Meanwhile, the pressure to mature corporate bonds remains very high. In the remainder of 2023, the total value of bonds due is VND106,953 billion. Of which, 36% of the value of bonds due to mature belong to the real estate group with more than VND38,461 billion, followed by the banking group with VND30,660 billion (accounting for 28.6%).

From now until the end of the year, it is expected that there will be a number of large corporate bond issuances, such as: BIDV Securities Joint Stock Company has approved a private issuance plan with a total issuance value of VND 800 billion, with a maximum quantity of 8,000 bonds. These are non-convertible bonds, without warrants, without collateral, with a face value of VND 100 million/bond, with fixed, floating or combined interest rates, depending on market conditions.

Vietjet Aviation Joint Stock Company has also approved a private issuance plan with a total issuance value of VND2,000 billion, quantity of 20,000 bonds. These are non-convertible bonds, without warrants, without collateral, face value of VND100 million/bond, term of 60 months, maximum fixed interest rate of 12%/first 2 periods, subsequent periods equal to 12-month savings interest rate of 4 State banks + 3.5%/year.

According to VBMA, the total size of the corporate bond market to date has only reached about VND1.15 trillion, accounting for nearly 15% of the country's GDP. This figure is much lower than that of more developed countries in ASEAN such as Malaysia (56% of GDP), Singapore (38% of GDP) or Thailand (25% of GDP).

Although corporate bonds are quiet, many experts believe that this market has passed its most difficult period and is expected to be more vibrant in the coming time. In particular, policies to remove difficulties for the corporate bond market, most recently Decree 08, will help the bond market gradually regain investors' confidence when it becomes safer and more sustainable.

Mr. Le Hong Khang - Director of FiinRatings Credit Ratings said that the corporate bond market has passed the boom period of 2018-2021 and will now focus on in-depth development, entering a stage of sustainable development.

“Development in depth is also very important, and is also a good stage for the market to look back and overcome problems from the previous stage,” said FiinRatings expert.

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