The corporate bond market showed signs of becoming active again at the end of the year, after a long period of stagnation due to the impact of incidents related to Tan Hoang Minh, Van Thinh Phat... Capital demand at the end of the year is usually high and the bond market is about to have an important turning point in policy.

From the beginning of 2025, the amended Securities Law will officially take effect, including many new breakthrough points. There are many new points on bond issuance, strengthening discipline to help the market develop more sustainably.

The law has many provisions to help prevent risks for investors, help investors have more information and easily identify businesses and corporations with high safety. Issuing organizations will have to comply with stricter criteria, such as debt-to-equity ratio, conditions on bondholder representatives and credit ratings according to regulations...

Privately issued bonds are sold to individual investors if they are professional investors and then the bonds must be rated and must be guaranteed by a bank or have collateral.

This is the time for organizations to prepare capital attraction plans for the new year ahead, with many policy changes towards removing obstacles for businesses to develop. The economy is forecast to improve.

traiphieudoanhnghiep FiinGroup.gif
The corporate bond market has shown signs of warming up recently. Photo: FiinGroup

Real estate giants enter the game strongly

Vinhomes Joint Stock Company (VHM), part of the Vingroup ecosystem of billionaire Pham Nhat Vuong, announced on December 13 a resolution on a plan to offer up to VND4,000 billion in non-convertible private bonds with a term of 36 months. These are secured bonds. Previously, on November 20, Vinhomes successfully issued VND2,000 billion in bonds with a term of 36 months.

Vinhomes wants to attract capital through bonds after the company officially ended its largest-ever treasury stock purchase campaign on the stock market, spending about VND11 trillion to buy nearly 247 million VHM shares.

VietJet Air (VJC), chaired by billionaire Nguyen Thi Phuong Thao, plans to issue non-convertible private bonds to raise VND2,000 billion. The bonds are unsecured.

Many other businesses have recently stepped up bond issuance. Huy Duong Group JSC has just completed raising VND900 billion from issuing 60-month bonds with an interest rate of 12.5%.

Becamex IDC also successfully issued VND1,080 billion in non-convertible bonds, 4-year term, secured by assets, interest rate 10.7%/year.

Previously, in September, Truong Loc Real Estate - related to Vinhomes, raised more than VND1,900 billion from bonds. Van Huong Investment and Tourism also raised nearly VND2,000 billion in bonds, with a term of 36 months. Nam Long Investment (NLG) also raised VND1,000 billion.

Statistics from the Vietnam Bond Market Association (VBMA) show that in November there were 29 private corporate bond issuances, worth more than VND24 trillion.

The cumulative 11-month figure is nearly VND375,000 billion, including nearly VND343,000 billion in individual bonds. The majority belongs to the banking group with nearly VND270,000 billion. The real estate group accounts for 17% with nearly VND64,000 billion.

Real estate businesses are stepping up capital mobilization from many channels, including bonds, to first anticipate the warming and increasing real estate market, and to focus capital on many ongoing projects such as Co Loa, Doi Rong, Vu Yen billionaire island... and other large projects.

In addition, many businesses also use the money to handle the large bond maturity period that falls at the end of this year when the cash flow of many real estate businesses is still weak in the first 9 months of the year. According to the issuance plan, most of the money that Nam Long Investment has just mobilized from the bonds will be used to pay the principal and interest for the 2 maturity bond lots.

According to Mirae Asset Securities, in December, about VND39,000 billion worth of bonds will mature, of which VND7,000 billion will come from real estate businesses. Of these, about 16 bonds from 15 different businesses are likely to be unable to pay on time and may need to postpone the payment deadline according to Decree 08/2023/ND-CP. Most of these businesses operate in the real estate development sector.

According to VIS Ratings, the total value of overdue bonds in the whole market is about VND189,000 billion from April 2022 to November 2024. The energy group has the highest overdue rate, while the residential real estate group accounts for 60% of the total overdue bonds.

Hung Thinh Land under CEO Le Trong Khuong: Drowning in losses, debt on bonds Hung Thinh Land is a large real estate company, only behind a few names such as Vinhomes of billionaire Pham Nhat Vuong or Novaland of Mr. Bui Thanh Nhon. Under CEO Le Trong Khuong, the company has recently suffered losses and drowned in debt on bonds.