Vietnamese firms make 11 private bond placements for $1.1 bln in Q1

Vietnam’s struggling corporate bond market witnessed 11 private placements in the first quarter of this year for a combined value of VND24,435 billion ($1.1 billion), accounting for 86.2% of the period’s total value of all bond issuances.

The market recorded a total of 14 corporate bond issuances in the three months, including these private placements, with proceeds totaling VND28,335 billion (over $1.2 billion), up 59% from a year earlier.

Among the 11 private placements, Vietnamese company Nam An Investment and Trading JSC on March 10 raised VND4,700 billion (more than $200 million) from its bonds issued with an 18-month term.

The Hanoi-headquartered real estate company, established in August 2016, runs its main office in the Vinhomes Riverside ecological urban area in Long Bien district.

Also in March, Nam An signed a business cooperation contract with a carmaker that is a member of a major conglomerate for the development of an automobile manufacturing complex project.

Also on March 10, Dream City Villas Real Estate Co. Ltd. of Masterise Group issued bonds via a private placement for VND2,300 billion ($98 million) with a coupon rate of 6% per annum.

Dream City Villas in July last year mobilized more than VND7,200 billion ($306.7 million) via three issuances of bonds with a fixed coupon rate of 8% per annum, due after one year and one day. The proceeds were to be used to acquire the Dream City eco-urban project in the northern province of Hung Yen from a major property developer belonging to the group of the 30 bluechips on the Vietnam stock exchange.

In another private placement this March, Luxury Living Furniture Co. Ltd. on March 13 raised VND4,800 billion ($204.5 million). The bonds will mature after five years, and the rate is a combination of a fixed rate of 9.5% per year and floating interest rates.

Luxury Living, formerly known as Masterise Living Co., Ltd., was established in March 2020, with its former owner being Masterise Group. This January, the company got its new owner, 42-year-old Pham Thanh Quyet. He was also at the helm of Masterise Living.

On March 16, Hung Yen Urban Development and Investment Co. issued one-year bonds via a private placement for VND7,200 billion ($306.7 million). The coupon rate is unknown. The firm was established in April 2022, but it was formerly known as Masterise Hung Yen Co., Ltd, which used to be part of Masterise Group. This January, the company announced its new owner is Ngo Van Kien, a 27-year-old man.

March 16 also saw Phuong Nam Star Urban Development and Business Investment JSC issue bonds for VND4,695 billion (more than $200 mln). The maturity is 1.5 years, and coupon rate, 13% per annum.

The CEO and legal representative of Phuong Nam is Nguyen Thi Huyen Tran, a 55-year-old woman. Data collected by The Investor shows she used to be a deputy CEO in charge of administration at a company in the same bond issuing group with Nam An Investment and Trading JSC.

More than $1.1 billion raised via the 11 private placements is seen as a positive result by market observers amid obstacles in the corporate bond market, where investor confidence has been hit seriously by wrongdoings by other issuers. However, some argued that these private placements merely aim at debt restructuring.