Vietnam bond market warming up

A total of 41 businesses in Vietnam issued VND110.2 trillion ($4.34 billion) worth of private placement corporate bonds in the year to June 21, 2.6 times more than the same period in 2023, according to the Ministry of Finance.

Of the total, credit institutions accounted for 63.2% (VND69.6 trillion) and real estate businesses 28.6% (VND31.5 trillion).

Regarding investor structure, organizations buying corporate bonds in the primary market made up 94.8% of the issuance volume, focusing on credit institutions (53.5%) and securities companies (21.9%). Individual investors bought 5.2% of the total issued bonds.

The average coupon was 7.41% per year and the average issuance term was 3.78 years. About 14.5% of issued bonds had collateral.

The redemption value was VND59.8 trillion ($2.35 billion), down 39% over the same period in 2023.

According to the Vietnam Bond Market Association (VBMA), in the second half of 2024, nearly VND140 trillion ($5.5 billion) worth of bonds will mature, and of them, VND59 trillion were issued by real estate firms, or 42%.

Leading broker VNDirect Securities estimated that by May 29, more than 90 issuers had reached agreements with bondholders to extend repayment deadlines, with a total value of over VND144 trillion ($5.66 billion).

Some bondholders have chosen to exchange bonds for other assets, for example real estate, it said, adding companies have also negotiated with bondholders on interest rate reductions and interest payment rescheduling.

To continue stabilizing and developing the market, the Ministry of Finance has proposed the government approve solutions to manage macro policies, control inflation, and promote disbursement of public investment capital; remove difficulties and stabilize the real estate market; monitor payment of due corporate bonds; and strengthen information and communication efforts.

Relevant units will actively organize the market and improve the effectiveness of management and supervision, while completing provisions related to corporate bond issuance in the Securities Law, the Enterprise Law, and others.

The government has approved the above solutions and assigned ministries and agencies to ensure enforcement, the ministry said.