Vietnam property developers raise $2.28 bln from private placement bonds in 9 months

Real estate businesses in Vietnam mobilized about VND55.6 trillion ($2.28 billion) worth of bonds via private placements in the first nine months of the year, according to the Vietnam Bond Market Association (VBMA).

The association said the market started the year in the doldrums, but began to pick up in July. In the third quarter, more than 10 real estate businesses completed private placement bond issuances, raising nearly VND31.4 trillion ($1.29 billion).

Capitaland Tower Co., Ltd. was the most successful issuer with a total value of VND12.24 trillion ($502 million). The company issued four bond packages, all on July 25, with terms of 60 months and a fixed coupon rate of 1% per year.

Capitaland Tower is known for The Sun Tower office building in Ba Son Complex, District 1, Ho Chi Minh City. The project has a total floor area of over 107,000 square meters, including five basements and 55 floors, with 87,000 square meters of Grade A office space and 20,000 square meters of high-end trade space.

Hung Yen Urban Investment and Development Co., Ltd. also successfully mobilized VND7.2 trillion ($295.3 million) in one-year bonds, with a coupon rate of 0% per year.

Other companies that raised over VND4 trillion ($164 million) from bond issuances included Nam An Investment and Trading JSC, Southern Star JSC, Lan Viet Real Estate Co., Ltd., and Tan Lien Phat Tan Cang Logistics and Real Estate JSC. Their bond batches have coupon rates ranging from 10% to 13.3% per year.

Last month, businesses under industrial property developer Becamex IDC completed the offering of VND4 trillion ($164 million) worth of bonds. Becamex IDC issued VND2 trillion with a four-year term and a coupon rate of 12% per year, while Vietnam-Singapore Industrial Park Joint Venture Company Limited (VSIP) issued VND2 trillion with a term of 7 years and a rate of 10.5% per year.

VSIP is a joint venture between Becamex IDC and Sembcorp Development of Singapore, established in 2006. From the country’s industrial hub of Binh Duong, VSIP has developed a network of industrial parks to provinces nationwide such as Bac Ninh, Hai Phong, Quang Ngai, Hai Duong, Nghe An and Binh Dinh.

Nam Long Group plans to offer VND500 billion ($20.5 million) of privately placed bonds with a 5-year term and a coupon rate of 9.6% per year for the first six months and a floating rate in the following months with a margin of 2.5% per year. These are non-convertible bonds without warrants but with collateral.

Meanwhile, Van Phu Invest will issue VND650 billion ($26.65 million) of non-convertible bonds without warrants but with collateral.

According to the VBMA, the total value of corporate bond issuances in the first nine months of this year reached over VND160.25 trillion ($6.57 billion), including 22 public offerings worth VND20.42 trillion ($837.4 million), accounting for 12.7% of the total, and 129 private placements worth VND139.83 trillion ($5.73 billion), or 87.3%.

The banking industry made up the majority with VND69.72 trillion ($2.86 billion), or 43.5%.

The average coupon rate decreased from 10.5% per year in June to 9.4% in July and August and 9.1% in September.

In the nine months, issuers bought back more than VND140.1 trillion ($5.75 billion) of bonds, the VBMA said, adding that maturity pressure has dropped significantly with about VND60.83 trillion ($2.49 billion) of bonds due in the remaining months of this year, compared to VND285.2 trillion ($11.7 billion) at the year beginning.