Corporate bonds bought back before maturity are higher than the amount issued

The Ministry of Finance has just informed about the situation of individual bonds in October and the first 10 months of 2023. Specifically, in the first 10 months of the year, 70 enterprises issued with a volume of 180,400 billion VND (down 45.1% compared to the same period in 2022). In October 2023 alone, the issuance volume was 41 trillion VND, an increase of 17,000 billion VND compared to September.

On the other hand, the volume of privately issued corporate bonds bought back before maturity was VND190,700 billion (up 30.2% over the same period in 2022). In October, businesses bought back about VND14,200 billion.

According to the Ministry of Finance, the volume of individual corporate bonds maturing in the last 3 months of 2023 is 61,600 billion VND.

The Ministry of Finance said that recently, the Ministry has received complaints from investors related to the SCB Bank - Van Thinh Phat Group case and petitions from people who came to deposit savings and were invited by some banks to buy corporate bonds.

These petitions are being handled by the Ministry's leaders and the State Securities Commission. Regarding this issue, from 2019 to present, the Ministry of Finance has issued 6 documents requesting the State Bank to strengthen management and supervision of commercial banks in the distribution, commitment to buy back, provision of services related to corporate bonds and regularly coordinate to provide information on the situation of the corporate bond market.

“Currently, the Ministry of Public Security has concluded the investigation into the case of Tan Hoang Minh Group and is investigating the cases of SCB Bank and Van Thinh Phat Group. The Ministry of Finance has also coordinated to transfer the investors’ petitions to the Ministry of Public Security,” the Ministry of Finance said.

At the end of October, in an announcement, the Ministry of Finance once again recommended investors to decide to invest in privately issued corporate bonds.

Finance - Banking - Corporate bonds bought back before maturity are higher than issued amount — The Ministry of Finance once again recommends investors to decide to invest in privately issued corporate bonds.

The Ministry of Finance emphasized that investors need to note that individual corporate bonds are financial products that, according to the law, are only for professional securities investors. When purchasing and trading corporate bonds, they must have full access to the issuance documents, assess the level of risk when purchasing bonds, and be responsible for their investment.

“Even though the Securities Law and guiding decrees have stipulated that only professional securities investors are allowed to buy individual corporate bonds, many individual investors deliberately violate regulations to become professional investors to buy individual corporate bonds,” the Ministry of Finance shared.

The Ministry of Finance also said that, in order to ensure the legitimate rights and interests of investors, the current Government Decrees on the issuance of individual corporate bonds have fully stipulated the responsibilities of the issuing enterprise in timely payment of interest and principal of bonds when due and exercising the accompanying rights (if any) for bond owners according to the terms and conditions of the bonds; must repurchase bonds before maturity if there are violations in bond issuance activities.

The Ministry of Finance requires businesses to urgently arrange all resources to pay the principal and interest of due bonds to investors as committed.

In case of difficulties in balancing payment sources, it is recommended that the issuing enterprise proactively negotiate with investors to consider harmonious, reasonable and effective measures to restructure bond debts and payment methods in accordance with the actual situation and in accordance with legal regulations.

At the same time, businesses must change themselves, proactively increase transparency, and publish information about the business situation to regain the trust of the market and investors .

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