Corporate bond issuance surges, redemption pressure persists

May 17th at 10:09
17-05-2024 10:09:33+07:00

Corporate bond issuance surges, redemption pressure persists

Corporate bond issuances in April jumped by 29.1 per cent from March and a striking 5.2 times year-on-year to reach VNĐ13.94 trillion.

The construction of a building near Bến Thành Market by Viva Land, a subsidiary of Vạn Thịnh Phát Group, stalled at the end of 2022 following the arrest of the company’s chairwoman, Trương Mỹ Lan. — VNS Photo Bồ Xuân Hiệp

According to a report by the Việt Nam Bond Market Association, 13 issuances were made by six companies last month.

Total corporate bond issuance has reached VNĐ36,088 trillion since the start of 2024, of which public and private issuances make up VNĐ8.9 trillion and VNĐ27.2 trillion, respectively.

Companies redeemed bonds worth VNĐ37 trillion prematurely in the period.

But redemption pressure remains a concern, especially for the real estate and renewable energy sectors.

As of the end of last year outstanding corporate bonds were worth VNĐ1 quadrillion, according to a report by the Ministry of Finance.

The value of maturing bonds this year is VNĐ240.1 trillion, with the real estate sector accounting for VNĐ99.6 trillion, it said.

It has identified 18 out of 21 companies at risk of failing to redeem bonds worth VNĐ31.2 trillion this year.

A number of companies have been fined recently for failure to submit information such as financial statements, report on capital usage, principal payments, and bond interest.

The corporate bond market has seen significant growth in recent years, driven by demand for funding among property developers and banks.

However, problems such as the property market slump and investigations into financial fraud by major property developers recently have contributed to the current challenges.

The Government has hauled up the finance ministry and central bank for their poor management that led to the problems. 




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