VietinBank, Novaland unit lead September corporate bond issuance

Vietnam’s corporate bond market saw 25 private placement issuances and one public offering in September, led by VietinBank, property developer Nova Thao Dien, and Masan Group.

The 26 issuances were for a total value of more than VND15,598 billion (about $652 million), according to the Vietnam Bond Market Association (VBMA).

The commercial banking sector ranked first in terms of issuing value with VND9,623 billion (over $402 million). VietinBank issued the most with VND3,090 billion, followed by VPBank with VND2,000 billion, Orient Bank with VND1,800 billion, and SeABank with VND750 billion.

The report said real estate companies ranked second after the banking sector. Of these, Novaland’s Nova Thao Dien issued VND2,300 billion ($96 million) of five-year bonds.

Multi-sector corporation Masan Group issued VND1,500 billion ($62.656 million) also of 5-year bonds.

For issuance plans later this year, VBMA said the board of Ba Ria-Vung Tau House Development JSC has approved a plan to issue under a private placement but did not disclose any details.

Meanwhile, the board of Transport and Industry Development Investment JSC (TCD) has okayed a plan to issue VND990 billion (nearly $41.37 million) of unconvertible, secured and without warrant bonds under a private placement, tenor of five years and fixed coupon rate of 11% per year for the first four periods, floating rate equal to reference rate + 4% per year for the remaining periods.

Since the beginning of the year, there were two issuances to the international market of Vingroup with a combined value of $625 million.

The period also saw 20 issuances to the public with a value of VND10,499 billion ($438.7 million), accounting for 4% of the total issuing value, and 389 issuances under private placements worth VND233,692 billion ($9.76 billion), accounting for 96%.

The total issuing value under public offerings decreased approximately by 9% compared to last year, while the total issuing value under private placements decreased nearly by 45% compared to last year.

The commercial bank sector ranked first in terms of issuing value in 2022, accounting for 55% of the total.

The real estate sector ranked second with 20% by Novaland with VND9,857 billion ($412 million), followed by Eagle Side Development and Investment Corp. with VND3,930 billion. The average issuing coupon rate of this group was 10.35% per year.

By the end of September, companies had redeemed VND142,209 billion ($5.94 billion) of corporate bonds, increasing by 67% compared to the same period of 2021, the VBMA reported.

The long-awaited Government Decree 65 on private placement of bonds, which was issued on September 16, will provide a spur for qualified issuers to swiftly develop a bond offering strategy, says lawyer Nguyen Thanh Ha, chairman of SB Law.

The new decree amends and supplements Decree 153 on private placement of bonds. With multiple new regulations, the decree is expected to address difficulties faced by issuers and open up capital flows from this mobilization channel for socioeconomic activities.

Vietnam’s Finance Minister Ho Duc Phoc said Monday that corporate issuers have pledged they would pay bondholders their due when bonds mature. He gave this assurance in the wake of corporate bondholder concerns about their investment after police arrested Truong My Lan, chairwoman of Ho Chi Minh City-based property developer Van Thinh Phat Group, for alleged fraud in the issuance and trading of corporate bonds in 2018 and 2019.

In April, Do Anh Dung, chairman of property developer Tan Hoang Minh Group, was also arrested for alleged fraudulent appropriation of property via corporate bond issuances.