Corporate bond market shows early recovery signs in 2026

Corporate bond market shows early recovery signs in 2026

Vietnam’s corporate bond market has shown early signs of recovery in 2026, with real estate driving issuance growth while default risks ease and debt recovery improves despite lingering macroeconomic uncertainties.

According to the Vietnam Bond Market Association, cumulative data from the start of 2026 to the disclosure date of March 27 shows total corporate bond issuance reaching $953.3 million.

This encompasses nine public offerings worth $516.7 million, accounting for 54.2 per cent of the total and four private placements worth $436.6 million, making up the remaining 45.8 per cent.

The latest report by VIS Rating released on April 2 also noted that the corporate bond market remained relatively subdued in the first quarter (Q1) of 2026.

The main reasons were the prolonged Lunar New Year holiday and a cautious stance among issuers. Most companies are still in the process of finalising and awaiting approval of their business plans and capital-raising strategies at their AGMs.

Despite the overall slowdown, primary issuance value still recorded encouraging growth. According to VIS Rating, total new issuance in Q1 of 2026 reached $1.22 billion, up 22 per cent on-year.

By the end of Q1, total outstanding corporate bonds stood at approximately $57.2 billion, with 361 issuers participating in the market. The banking sector continued to lead in outstanding value at $27.4 billion, followed by the real estate sector with $15.6 billion.

A notable development in Q1 was that the real estate sector surpassed banks to become the largest contributor to new issuance, accounting for 53 per cent of total issuance value.

Another bright spot in Q1 was the sharp decline in late payment rates for principal and interest, which fell to near zero. Only one short-term delay was recorded during the quarter, involving Thuan Hoa Ha Giang Hydropower JSC, and it was fully resolved within a week.

In addition, the cumulative bond recovery rate improved significantly. Total recovered value in Q1 approximated $200 million, lifting the cumulative recovery rate to approximately 46 per cent, compared with 33 per cent in the same period last year.

Although the corporate bond market has shown positive signs compared to a year earlier, VIS Rating also warned of risks stemming from US-Iran tensions.

These could drive up energy prices and inflation, putting pressure on domestic interest rates and increasing borrowing costs for businesses.

VIS Rating forecasts that the corporate bond market will likely accelerate in the coming quarters of 2026 as firms’ annual business plans are approved.

However, capital absorption capacity and borrowing costs will largely depend on macroeconomic conditions and companies’ ability to adapt to external shocks.

Speaking at the 2026 Corporate Bond Market Forum on April 2, Nguyen Hoang Duong, vice chairman of the State Securities Commission (SSC), said that total bond maturities this year amount to $7.62 billion, down 1.7 per cent from $7.75 billion in 2025.

“This pressure forces companies to proactively restructure their finances or seek alternative funding sources. However, it will also help filter out weaker firms and strengthen well-performing issuers, contributing to a more sustainable market structure,” Duong said.

Amid rising deposit interest rates, the SSC executive warned that corporate bond issuance costs will increase, and the market will also reprice risk. In this context, issuers must enhance transparency and ensure efficient use of capital to maintain access to funding channels.

Despite ongoing challenges, the regulator stated that it is steering the corporate bond market towards a safer, more transparent and sustainable development path through coordinated measures.

“Although corporate bonds still account for a relatively small share of the economy’s capital structure, they will play an increasingly important role in providing medium- and long-term funding, especially as the banking system faces maturity mismatches,” Duong said.

VIR