Corporate bond issuance hits five-month low in July

Corporate bond issuance hits five-month low in July

The decline came after issuance accelerated for three consecutive months, rising from VNĐ44 trillion in April to VNĐ55 trillion in May and VNĐ132 trillion in June.

Banks dominated July's new supply, accounting for 79 per cent, or about VNĐ21 trillion. — VNA/VNS Photo

The corporate bond market saw a sharp slowdown in new issuance in July, with total new bonds falling 80 per cent from the previous month to VNĐ26 trillion (US$994 million), the lowest level in five months, according to VIS Rating.

The decline came after issuance accelerated for three consecutive months, rising from VNĐ44 trillion in April to VNĐ55 trillion in May and VNĐ132 trillion in June.

Banks dominated July's new supply, accounting for 79 per cent, or about VNĐ21 trillion, while residential property developers contributed 11 per cent. Other sectors made up the remaining 10 per cent.

Private placements continued to be the main fundraising channel, representing 80 per cent of total issuance, while public offerings accounted for 20 per cent.

Despite the contraction in supply, newly issued bonds had longer maturities. The average maturity increased to 5.5 years from 5.1 years in June. Bonds with maturities of five to 10 years accounted for 69 per cent of issuance, while those with three-to-five-year terms made up 30 per cent.

Coupon rates varied significantly between sectors. The average interest rate on bank bonds stood at 8.7 per cent, compared with 12.5 per cent for residential property bonds.

Despite the sharp monthly decline in issuance, Việt Nam's outstanding corporate bond market remained sizeable at nearly VNĐ1.5 quadrillion as of July. Private-placement bonds accounted for over VNĐ1.3 quadrillion, while publicly offered bonds represented VNĐ180 trillion.

Outstanding private-placement bonds edged down from VNĐ1.311 quadrillion in June, while public bonds increased from VNĐ175 trillion. Banks remained the largest group of issuers by outstanding value, with VNĐ670 trillion, followed by residential property developers with VNĐ452 trillion.

Tourism and hospitality companies had VNĐ60 trillion of outstanding bonds, followed by financial institutions at VNĐ45 trillion, energy companies at VNĐ39 trillion, construction firms at VNĐ35 trillion, and transport businesses at VNĐ34 trillion.

In terms of remaining maturity, the largest portion of outstanding bonds, worth VNĐ589 trillion, had between one and three years until maturity. Bonds with more than five years remaining totalled VNĐ392 trillion, while VNĐ335 trillion had less than one year and VNĐ171 trillion had between three and five years.

Meanwhile, activity on the secondary market improved substantially.

Average daily trading value reached VNĐ8.1 trillion in July, up 44 per cent month-on-month. Trading was concentrated in bonds issued by several large companies in the property, banking and transport sectors.

Liquidity was particularly active among bonds with less than one year remaining and those around the two-to-three-year maturity range. 

Residential property bonds accounted for a significant share of transactions in bonds with less than one year and around two years remaining, while bank bonds were traded across a broader range of maturities.

Credit-quality indicators also showed some improvement. The trailing 12-month bond default rate edged down to 0.29 per cent in July from 0.30 per cent in June. Newly defaulted bonds during the month totalled VNĐ2.2 trillion.

The rate was also substantially below the 0.56 per cent recorded in July 2025.

Progress continued in resolving previously delayed bond payments. By July, VNĐ142 trillion had been repaid to bondholders, up from VNĐ137 trillion a month earlier. Bonds whose maturity dates had been extended stood at VNĐ39 trillion, while VNĐ112 trillion remained without updated information on their resolution.

Maturity pressure, however, remains a key factor for the market. VIS Rating estimated that VNĐ242 trillion of corporate bonds will mature over the next 12 months, compared with VNĐ189 trillion that matured during the preceding 12-month period. 

Bizhub