Bond market rebounds strongly

With the recovery of the bond market, businesses have more opportunities to raise capital to develop production and business.

Through the screening stage

In 2025, the banking industry will promote the issuance of bonds to increase capital to the public to meet the needs of individual investors. In the photo: Customers transact at the Joint Stock Commercial Bank for Foreign Trade of Vietnam. Photo: Do ​​Tam

According to statistics from FiinRatings Joint Stock Company (operating in the field of credit rating, headquartered in Hanoi), in the first two months of 2025, the total value of bond transactions - both public and private bonds, reached VND 167.2 trillion, up 19% compared to the peak in December 2024. The banking and real estate sectors still accounted for the majority of transaction value in the first two months of the year, with proportions reaching 36% and 38.9%, respectively, equivalent to an increase of 35.6% (reaching VND 60.2 trillion) and 7% (reaching VND 65.1 trillion).

Most of the newly issued corporate bonds came from credit institutions to supplement capital, accounting for 94.6% of the total issuance value. Banks will continue to increase bond issuance in 2025 to meet capital needs for credit growth and the requirement to reduce savings interest rates will widen the gap between credit growth and deposit mobilization growth.

The cumulative corporate bond repurchase activity in the first two months of 2025 reached over VND17.2 trillion, up 22.0% over the same period last year. However, the repurchase value in February only reached VND3.85 trillion, down 71.2% compared to January, at the lowest level in the past 3 years, due to the decrease in repurchase demand from real estate issuers, with a decrease of up to 95% compared to the previous month.

FiinRatings also pointed out that, compared to the beginning of the year, the market recorded 77 more problem corporate bond lots (calculated to include the value of the lots of bonds with delayed interest/principal payments and corporate bonds with extended or delayed payment terms compared to the original maturity date, calculated cumulatively up to February 28, 2025), worth VND5.54 trillion. However, the added value has reached the lowest level since the peak of problem corporate bonds in February 2023, of which 63.4% of the value comes from the real estate group. These businesses have had a series of corporate bond lots with delayed payment terms before and still have large debt obligations due in the next 12 months, signaling that the situation of delayed payment and postponement will continue in 2025 for the above group.

In addition, in February, some other industry groups such as manufacturing and trade services still issued more problematic corporate bonds.

However, the decrease in the rate of problematic corporate bonds is still a positive sign that the bond market has passed the screening stage to recover.

Forecast to increase 15-20%

Entering the second quarter of 2025, an estimated VND40.6 trillion of individual bonds will mature. Specifically, VND16.5 trillion of maturity (40.7% of total value) belongs to the real estate group, VND11.9 trillion (29.2% of total value) belongs to other sectors and VND8.2 trillion (20.2% of total value) belongs to the credit institution group.

According to the Vietnam Bond Market Association, in the remaining 10 months of 2025, the total value of bonds due will be VND192,303 billion. Of which, 54.6% of the value of bonds due to mature belongs to the real estate group with VND105,039 billion, followed by the banking group with VND41,166 billion (accounting for 21.4%).

According to experts, in 2025, the banking industry will continue to promote the issuance of bonds to increase capital to the public to meet the needs of individual investors, following the increasing trend in 2024.

FiinRatings Joint Stock Company also forecasts that the corporate bond market will increase by 15-20% in 2025 thanks to commercial banks increasing the issuance of Tier 2 capital when deposit interest rates do not increase. In particular, banks must continue to increase the issuance of Tier 2 capital, which is corporate bonds, to meet credit growth requirements as directed by the Government while deposit interest rates are controlled to not increase.

According to VCBS Securities Company, the volume of corporate bond issuance will be more positive in 2025. Because the low interest rate level will create favorable conditions for businesses to issue bonds at lower costs and restructure capital. The issuance volume will still be led by bank bonds; while real estate businesses will also gradually regain investor confidence.

Economist, Dr. Nguyen Duc Huong, former Chairman of the Board of Directors of Loc Phat Joint Stock Commercial Bank (LPBank), said that the new regulations on private bond issuance and public offering applied in the second half of 2025 will be the basis for improving the quality of bond products and attracting investors to participate in this investment channel in the context of low savings interest rates.

To date, many credit institutions have announced plans to issue corporate bonds to supplement medium- and long-term capital to serve the increasingly large credit growth target. However, experts also commented that there will be a difference in the ability to issue bonds between reputable issuers and those with a history of late interest and principal payments. Institutional investors will still dominate the corporate bond market, while small-scale individual investors will tend to prioritize choosing publicly issued bond products with credit-rated issuers.

Source: https://hanoimoi.vn/thi-truong-trai-phieu-tang-manh-tro-lai-697474.html