Over $7.7 bln in Vietnam's private placement corporate bonds to mature in last 3 quarters

More than VND200 trillion ($7.7 billion) in privately-placed corporate bonds will mature in the final three quarters of this year, with the real estate sector accounting for half, according to independent credit rating provider S&I Ratings.

Specifically, bonds worth VND33.6 trillion ($1.29 billion) are set to come due in Q2, VND91.2 trillion ($3.51 billion) in Q3, and VND77.6 trillion ($2.99 billion) in Q4.

Of the total, VND26.5 trillion ($1.02 billion) had previously been granted maturity extensions.

The real estate sector accounts for half of the bond maturities in the three quarters, totaling an estimated VND103.9 trillion ($4 billion).

In Q3 alone, the sector will face as much as VND57.5 trillion ($2.21 billion) in maturing bonds.

According to S&I Ratings, bond maturities in Q1 reached only VND17.2 trillion ($662.29 million), primarily concentrated in the real estate sector (48%) and manufacturing (33%).

Late payments on corporate bonds were estimated at VND21.5 trillion ($827.88 million) in the quarter, with real estate representing VND10.4 trillion ($400.46 million), or 49% of the market.

S&I Ratings said real estate companies have continued to ramp up borrowing, pushing their debt-to-equity ratio at the end of 2024 to the highest level since 2018. This indicates that their financial pressure will remain high in the near future.

The company estimated that issuers made buybacks of VND26.9 trillion ($1.03 billion), with VND17.2 trillion ($662.29 million) in bonds maturing in Q1.

As a result, the total value of outstanding corporate bonds is now around VND1.3 quadrillion ($50.05 billion), down by VND24 trillion ($924.27 million) from the end of 2024, equivalent to 11% of GDP.

The banking and real estate sectors still hold the largest chunk, accounting for 49.4% and 33.7%, respectively, of the outstanding bond volume.

Sluggish issuance of privately-placed corporate bonds

Q1 saw 11 bond issuances totaling VND20.1 trillion ($774.08 million), including nine public offerings worth VND18.1 trillion ($697.05 million) and two private placements valued at VND2 trillion ($77.02 million).

The value of bonds issued dropped by 16.2% compared to the same period last year.

The data shows a strong increase in public offerings, while private placements sharply slowed.

S&I Ratings held that the revised Law on Securities, effective from 2025, along with the Ministry of Finane’s Circular 76/2024/TT-BTC regulating privately-placed corporate bond issuance, has already begun to impact the market.

Strengthening control and ensuring transparent information disclosure will help bolster investor confidence in corporate bonds, whether privately placed or publicly issued, it said.

While these measures may have short-term effects, in the long run, they will facilitate the absorption of bond supply in the coming period.

At the same time, in Q1, banks and securities firms accounted for the entire value of bond issuance, with banks alone making up 71.1%.

Financial institutions dominated issuance volumes, as these instruments attracted investor interest due to their relatively safe profile amid expectations of falling interest rates in the coming quarters.