The recovery signal of individual bonds comes from the return of the banking group. Banks are simultaneously stepping up bond issuance to consolidate medium and long-term capital sources to meet businesses' borrowing needs.
According to information from the Ministry of Finance on August 5, in July 2024, there were 56 successful private corporate bond issuances, with a volume of about VND 45,000 billion (down 15% compared to June 2024, but up 57% compared to the same period last year).
Specifically: Credit institutions (CIs) issued VND35,100 billion (accounting for 78% of the issuance volume), real estate enterprises issued VND5,500 billion (12.1%); enterprises in the remaining fields issued about VND4,400 billion (9.9%). If classified by secured bonds, there were VND6,300 billion of bonds issued with secured clauses (14% of the issuance volume). Of which, bonds of real estate enterprises with secured clauses accounted for 86.5%; bonds of CIs without secured assets.
For example, recently, in order to increase equity capital, as well as increase long-term capital sources, to meet lending requirements to promote economic development, Agribank has offered 10,000 billion VND in bonds to the public in 2024. Accordingly, Agribank bond interest rates are determined by the reference interest rate (average 12-month VND savings deposit interest rates, paid at maturity of 4 banks BIDV, Vietinbank, Agribank, Vietcombank on the date of interest rate determination) plus a margin of 2.0%/year. The bond term is 10 years, in the last 5 years before maturity, if Agribank does not buy back according to the right, the bond margin is up to 3.0%/year.
In 2024, the market is expected to see a number of banks issuing corporate bonds. In particular, VietinBank has approved a plan to issue public bonds in two phases in 2024. These are non-convertible bonds, without warrants, and have collateral with a maximum value of VND 8,000 billion, with a term of 8-10 years.
BIDV Bank plans to issue private bonds this year with a maximum total value of VND3,000 billion, with a term of 5-10 years; Loc Phat Vietnam Bank (LPBank) has also approved a plan to issue private bonds in the third and fourth quarters of 2024 with a maximum total value of VND6,000 billion, with a term of 2-7 years.
According to the Ministry of Finance, by the end of the first 7 months of this year, there were 174 successful private corporate bond issuances, with a volume of VND 161,500 billion (2.6 times higher than the same period in 2023). In which, by type of issuing enterprise: credit institutions issued more than VND 109,000 billion (accounting for 67.5% of the issuance volume), real estate enterprises issued nearly VND 38,700 billion (24%); enterprises in the remaining fields issued VND 13,800 billion (8.5%).
According to banking and finance expert Dr. Nguyen Tri Hieu, the potential for the development of the corporate bond market is still very large, but the infrastructure of the bond market needs to change dramatically. To develop the corporate bond market to recover, Vietnam must restore investor confidence by ensuring that outstanding bonds can repay debts on time.
The recovery signal of private bond issuance comes from the return of the banking group. According to MBS Securities, since the beginning of the year, banks are still the group with the highest issuance value with about 96,200 billion VND. The average interest rate is about 5.4%/year, term of 4 years. Banks issuing the largest value include: Techcombank (17,000 billion VND), ACB (12,700 billion VND), MBBank (8,900 billion VND)
The real estate group has the second highest issuance value in the entire market, mobilizing about 32,600 billion VND. The interest rates of real estate businesses are still among the highest at present, averaging up to 12%/year, with a shorter term of about 2.7 years.
Currently, the total value of corporate bonds that are overdue for payment obligations is estimated at nearly VND210 billion, accounting for 21% of the total outstanding debt in the market, of which the real estate group continues to account for the largest proportion, about 68%. From now until the end of the year, the total value of bonds due is nearly VND131,000 billion, more than 41% of which is in the real estate group, followed by banks at 14.6%.
Source: https://baohaiduong.vn/trai-phieu-rieng-le-phuc-hoi-co-su-gop-suc-cua-nhom-ngan-hang-389433.html
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