Corporate bond rates remain at minimum 12% annually
Corporate bond rates remain at minimum 12% annually
Many companies in Vietnam recently issued corporate bonds to raise capital, with annual coupons of at least 12%, much higher than bank bonds.
Phat Dat Real Estate Development JSC, whose headquarters is in HCMC’s District 7, had agreed to issue bonds worth VND300 billion, with annual interest rates of 12% and 14.45%. Also, the property developer announced on May 20 its third issuance of five-year bonds to raise VND500 billion.
Besides this, Van Phu – Invest Investment JSC announced in mid-May that it had successfully issued VND800 billion in over-three-year bonds, with the annual interest rate being 12%.
Similar to local firms, multiple banks in the country have announced their plans to issue bonds to raise capital this year.
According to the Vietnam Bank for Industry and Trade (VietinBank), it has received the green light from the State Bank of Vietnam to issue VND10 trillion in bonds to the public, and it was allowed to decide the annual interest rate. Vietinbank now holds over VND32 trillion in bonds.
Also, the Asia Commercial Bank (ACB) had agreed to a plan to implement the second bond issuance under a private placement this year, with the value of two-to-three bonds totaling VND5.5 trillion.
ACB will issue these bonds over five periods and apply fixed interest rates during the issuances. However, the annual interest rate must not exceed 6.75% for three-year bonds and 6.7% for two-year bonds.
The ACB’s first bond issuance under the private offering was implemented in early April, with the total value of bonds reaching VND2.5 trillion.
Data from the State Securities Commission shows that the balance of the local corporate bond market in late 2018 was over VND400 trillion, up 53% year-on-year. Most corporate bond issuances were implemented under the private placement plan.
The local bond market continued to show positive signs during the year. According to figures publicized by listed firms, there was over VND9 trillion in bonds issued in the first quarter, much higher than the year-ago figure of some VND2.8 trillion.
