Banks buy back bonds prematurely to restructure debts

Banks buy back bonds prematurely to restructure debts

Many banks are repurchasing bonds with maturities of two to three years while simultaneously issuing new bonds with longer maturities of five to 10 years.

Techcombank has recently announced a plan to repurchase six tranches of bonds ahead of schedule. — Photo vietnamfinance.vn

Many banks are repurchasing bonds ahead of schedule to restructure their debt obligations and optimise capital costs in the context of a volatile financial market.

ACB this week approved a plan to repurchase privately issued bonds worth a total of VNĐ15 trillion (US$570 million), due in June 2026. These are non-convertible, non-warrant, unsecured bonds and are not subordinated debt of ACB.

OCB also recently announced a plan to repurchase two tranches of bonds, OCB12501 and OCB12502, with a total principal value of VNĐ3 trillion, expected to be implemented at the end of April. These two tranches of bonds were issued by OCB in April 2025, with three-year maturities and interest rates of 5.35 per cent per year and 5.4 per cent per year, respectively, expected to mature in April 2028.

Similarly, VAB will repurchase all 2,300 bonds with code VAB12402 this month at the request of the bondholders. The total value of the bond issue, calculated at face value, is VNĐ230 billion. The seven-year maturity bonds were issued on April 16, 2024, and are expected to mature on April 16, 2031.

Techcombank has recently also announced a plan to repurchase six tranches of bonds ahead of schedule. The bonds’ total face value is expected to be VNĐ13.5 trillion, to be repurchased between April 21-28, 2026. These bonds were all issued domestically in April 2025, with maturities of two to three years, and are expected to mature in 2027-2028.

Meanwhile, TPBank proactively settled its long-term debts just a few months after issuance. As for the VNĐ100 billion bond tranche coded TPB12510, despite having a maturity of up to 10 years (maturing in 2035) and only being issued in June 2025, TPBank last month repurchased the entire amount. Previously, the TPB12524 bond issue was also settled by the bank after only six months in circulation.

Experts believe that banks are rushing to repurchase bonds ahead of schedule to restructure bond maturities and interest rates. Many banks are repurchasing bonds with maturities of two to three years while simultaneously issuing new bonds with longer maturities of five to 10 years.

Financial and banking expert Dr. Nguyễn Trí Hiếu commented that some banks are settling high-interest bond issues to issue new ones with lower interest rates to reduce costs.

This not only helps banks restructure debt maturities but also reduces the pressure of concentrated debt repayment in the future, Hiếu said.

Besides, according to experts from the VNDirect Securities Company, banks are rushing to repurchase bonds ahead of schedule due to excess liquidity. Repurchasing bonds early helps banks reduce excess capital, improve capital efficiency, and enhance their capital adequacy ratio.

However, experts believe that banks' early bond buybacks, whether due to subjective or objective reasons, reflect a common effort to restructure their balance sheets to become healthier.

Confirming that bond buybacks by banks are necessary to optimise their portfolios, finance expert Dr. Lê Xuân Nghĩa noted that banks need to clearly disclose the source of the buyback funds and their ability to raise capital again so that bond investors understand and avoid confusion in the current context. Transparency is key to maintaining confidence in the bond market, which experienced significant fluctuations. 

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