Corporate bond market sees positive signs

VCN – The corporate bond market has shown positive signs after Decree 08/2023/ND-CP was issued. To recover the corporate bond market, businesses need more drastic solutions to improve investors' confidence in corporate bonds and the active participation of management agencies.
Payment of bonds by Payment of bonds by "barter agreement": is it difficult or easy?
Corporate bonds worth 1.1 billion USD issued in March Corporate bonds worth 1.1 billion USD issued in March
Handling bonded debt by real estate will speed up the settlement of bad debt Handling bonded debt by real estate will speed up the settlement of bad debt
Corporate bond market sees positive signs
The corporate bond market showed more positive signs after Decree 08/2023/ND-CP was issued. Photo: Internet

The volume of placed bonds skyrockets after Decree 08 was issued

The placement of corporate bonds showed signs of recovery after Decree 08 was issued. According to the Vietnam Bond Market Association (VBMA) collected data from the Hanoi Stock Exchange (HNX) and the State Securities Commission of Vietnam (SSC), there were 11 placements of corporate bonds worth over VND26.42 trillion in March 2023.

A new private placement was announced in the last week of March with an issuance volume of VND600 billion by BAF Vietnam Agriculture Joint Stock Company.

These were 7-year-convertible bonds, without warrants and collateral, with an interest rate of 5.25 %/year. This is a positive figure compared with the only placement in January.

Data from the Ministry of Finance clarifies corporate bond issuance after Decree 08 was issued. Accordingly, a corporate bond worth VND 24,708 billion was issued in the first quarter, including the volume of corporate bonds valued at VND23,825 billion issued from March 6 when Decree 08 took effect, equivalent to 96% by volume. The average interest rate and issuance term are 7.75 %/year and 2.37 years. The real estate sector issued 98.2% of the corporate bond volume, and customers were mainly institutional investors, 99.99%, and banks accounted for 77%.

According to VNDIRECT Securities Company (VNDIRECT), in the first quarter of 2023, the primary corporate bond market had 14 placements. As a result, the total value of issued bonds reached over VND28.335 billion, up 59% compared to the fourth quarter of 2022 and down more than 60% year-on-year. According to VNDIRECT, all large private placements were implemented after Decree 08 was issued.

Masan Group issued the largest volume of 5-year corporate bonds in the first quarter with a total value of VND3,500 billion and floating interest rates. According to the VNDIRECT's experts, after Decree 08 was issued, the private placement showed a recovery when 9 out of 11 placements in the quarter were implemented. The total value of these 9 placements accounted for more than 97% of the total private placement value at the beginning of the year.

VNDIRECT's experts recommended that the large private placements in the quarter were all of the little-known enterprises; information about these enterprises is also very limited, even some companies have been established less than one year. "In the context that individual investors' confidence has not returned, the distribution rate of these bonds for individual investors is limited, buyers are mainly institutions, so these placements aim to restructure the internal debt of one or a few large organizations," said VNDIRECT's expert.

Regarding early redemption, according to VBMA's data compiled from HNX, the total value of bonds bought back before maturity in March 2023 was nearly VND14.3 trillion, up 137% month-on-month and 64% year-on-year. Construction and consumer goods are the two commodity groups that recorded the largest acquisition value in the month, reaching VND5 trillion (accounting for 35% of total acquisition value) and VND3.4 trillion (accounting for 24% of total acquisition value), respectively. Since the beginning of the year, the total value of bonds bought back by businesses has hit more than VND29.86 trillion (up 63% over the same period in 2022).

More drastic solutions need to be provided

Commenting on the corporate bond market prospect, the experts said that motivated by the loosening of regulations for the placement of Decree 08, shortly, there may be the issuance of the private placement of corporate bonds for restructuring internal debt as well the issuance of some enterprises at the end of March. However, to recover the market sustainably, it is necessary to have other comprehensive solutions to restore investor confidence and solve the market's illiquidity. Therefore, more drastic solutions need to be provided by businesses to strengthen investors' confidence in corporate bonds.

Real estate businesses should make great efforts to restructure their products to meet the market's real needs and take measures to handle inventory to get money to solve current difficulties in cash flow. In addition, the management agencies should speed up the settlement of legal procedures for real estate projects.

On the other hand, regulators should consider loosening conditions to allow large financial institutions such as banks to participate more deeply in the corporate bond market to create liquidity in the market and allow them to develop payment guarantees to restore investors' confidence gradually.

In addition, similar to the experience learned from handling the corporate bond crisis in regional countries such as Korea and China, the support for businesses to access capital, especially credit capital, to solve the short-term liquidity is very important", recommended by VNDIRECT's experts. However, the corporate bond market still awaits more positive signals from these solution groups.

The experts also said that the allowance of suspension of regulations on mandatory credit ratings and professional investors as per Decree 08 were factors that helped the private placement to recover during this period.

Mr Nguyen Hoang Duong, Deputy Director of the Department of Finance, Banking and Financial Institutions (Ministry of Finance), facing difficulties in cash flow after cases related to corporate bonds, and fluctuations in the international financial market, the Ministry of Finance has submitted to the Government to postpone the regulation on identification for professional investors until December 31, 2023, to help investors have more time to meet this regulation.

In addition, the Ministry of Finance reported to the Government to make a plan to control the market. Accordingly, the ministry has directed enforcement agencies to strengthen the management and supervision of the placement of corporate bonds and regularly give recommendations to issuers and services suppliers to comply with the law on consulting. Furthermore, the Ministry of Finance regularly recommends that individual investors assess risks when making investment decisions.

By Hoai Anh/Ngoc Loan

Related News

Significant changes ahead in the management of processing, export production, and export processing enterprises

Significant changes ahead in the management of processing, export production, and export processing enterprises

VCN - The management of goods in the processing, export production (EP), and export processing enterprise (EPE) sectors will undergo significant changes in customs procedures, aiming to streamline operations and create more favorable conditions for businesses.
Over 300 Southern enterprises attend workshop to provide feedback to the General Department of Vietnam Customs

Over 300 Southern enterprises attend workshop to provide feedback to the General Department of Vietnam Customs

VCN - On November 21, 2024, more than 300 enterprises from Southern Vietnam with significant import-export (I/E) volumes participated in a workshop held in Ho Chi Minh City. The event, organized by the General Department of Vietnam Customs, sought feedback on the draft decree amending and supplementing Decree No. 08/2015/ND-CP dated January 21, 2015, and the draft circular amending and supplementing Circular No. 38/2015/TT-BTC dated March 25, 2015, and Circular No. 39/2018/TT-BTC dated April 20, 2018, issued by the Minister of Finance.
Many positive signals in the corporate bond market

Many positive signals in the corporate bond market

VCN - The corporate bond market is expected to enter a new development phase, gradually improving quality, continuing to develop and deepen.
The corporate bond market will be more vibrant in the second half of the year

The corporate bond market will be more vibrant in the second half of the year

VCN - In the first half of 2024, with bond maturity pressure continuing to increase, corporate bond issuance has shown many positive signs compared to the previous year. According to forecasts, businesses' need to borrow and issue corporate bonds will accelerate in the second half of 2024.

Latest News

Focusing on inspecting inventory of public assets at units with large and complex assets

Focusing on inspecting inventory of public assets at units with large and complex assets

VCN - According to Official Dispatch No. 1456/BTC-QLCS on inspecting the preparation and implementation of the General Inventory of Public Assets recently issued by the Ministry of Finance, the inspection of the inventory of public assets focuses on units with large asset scale and large number of inventory items, complex assets, and slow implementation progress.
The government seeks approval for revised GDP, CPI targets

The government seeks approval for revised GDP, CPI targets

VCN - The Government submitted to the National Assembly for consideration and comments on adjusting the target for the growth rate of gross domestic product (GDP) to 8% or more; the average growth rate of the consumer price index (CPI) to about 4.5-5%.
Fiscal, monetary policies support demand stimulation, price stabilisation

Fiscal, monetary policies support demand stimulation, price stabilisation

These efforts, in conjunction with the implementation of monetary policies and other macroeconomic policies, aim to solve difficulties for businesses and the public, stabilise the macroeconomy, control inflation, ensure the balance of the economy, promote economic growth, and secure social welfare and people’s livelihoods.
Vietnam secures VND 157 billion from state enterprise divestment in 2024

Vietnam secures VND 157 billion from state enterprise divestment in 2024

VCN - The Ministry of Finance reported that in 2024, the divestment of state capital in 5 enterprises (F1) generated VND 157 billion from an initial value of VND 145 billion

More News

Vietnam gears up for potential inflation impact in 2025

Vietnam gears up for potential inflation impact in 2025

VCN - For sound price management and inflation control, Deputy Prime Minister Ho Duc Phoc directed officials to vigilantly track both domestic and international market dynamics. The goal is to proactively develop flexible strategies and solutions, enabling a swift response to any emerging challenges.
VN’s credit conditions in 2025 expected to be stable

VN’s credit conditions in 2025 expected to be stable

The credit conditions for Việt Nam will stabilise in 2025, after improving substantially over the past year, the rating agency VIS is forcasts.
State revenue in first month of the year equal to 14% of the estimate

State revenue in first month of the year equal to 14% of the estimate

VCN - According to the Ministry of Finance, in January - the first month of 2025, the total state budget revenue is estimated at VND275.9 trillion, equal to 14% of the estimate; meanwhile, the total state budget expenditure is estimated at VND134.4 trillion.
Securities 2025 expects a breakthrough in scale and quality

Securities 2025 expects a breakthrough in scale and quality

VCN – The positive factors inherent in the macro economy and the Vietnamese stock market will continue to create the foundation for the market to maintain stability, good liquidity, and growth in both scale and quality in the new year of At Ty 2025, Chairwoman of the State Securities Commission Vu Thi Chan Phuong said.
Cash reserves in stock accounts at six-quarter low amid margin rise

Cash reserves in stock accounts at six-quarter low amid margin rise

These funds are readily available in investor accounts, but remained undeployed as of the year-end.
Five solutions for developing stock market in 2025

Five solutions for developing stock market in 2025

VCN - On February 5, 2025, at the Gong-beating ceremony to open the stock trading at the Ho Chi Minh City Stock Exchange (HOSE), Deputy Minister of Finance Nguyen Duc Chi introduced five solutions for comprehensive development of the stock market.
Minister of Finance Nguyen Van Thang works with GDVC at the first working day after the Tet holiday

Minister of Finance Nguyen Van Thang works with GDVC at the first working day after the Tet holiday

VCN- On February 3, the first working day after the Tet holiday, Minister of Finance Nguyen Van Thang and the delegation visited and worked with the General Department of Vietnam Customs (GDVC).
The stock market after Tết 2025 presents both challenges and opportunities

The stock market after Tết 2025 presents both challenges and opportunities

Việt Nam’s stock market following the 2025 Lunar New Year (Tết Nguyên Đán) presents a complex landscape of risks and potential gains, driven by foreign capital inflows, economic resilience, and looming corporate bond maturity pressures, according to one securities expert.
Opportunities and challenges in Việt Nam

Opportunities and challenges in Việt Nam's crypto boom

Việt Nam boasts one of the most active investment communities in the cryptocurrency sector. However, protecting investors and promoting sustainable growth requires a robust legal framework.
Read More

Your care

Latest Most read
Focusing on inspecting inventory of public assets at units with large and complex assets

Focusing on inspecting inventory of public assets at units with large and complex assets

VCN - According to Official Dispatch No. 1456/BTC-QLCS on inspecting the preparation and implementation of the General Inventory of Public Assets recently issued by the Ministry of Finance, the inspection of the inventory of public assets focuses on units
The government seeks approval for revised GDP, CPI targets

The government seeks approval for revised GDP, CPI targets

The Government submitted to the National Assembly for consideration and comments on adjusting the target for the growth rate of gross domestic product (GDP) to 8% or more
Fiscal, monetary policies support demand stimulation, price stabilisation

Fiscal, monetary policies support demand stimulation, price stabilisation

These efforts, in conjunction with the implementation of monetary policies and other macroeconomic policies, aim to solve difficulties for businesses and the public, stabilise the macroeconomy, control inflation, ensure the balance of the economy, promote economic growth, and secure social welfare and people’s livelihoods.
Vietnam secures VND 157 billion from state enterprise divestment in 2024

Vietnam secures VND 157 billion from state enterprise divestment in 2024

The Ministry of Finance reported that in 2024, the divestment of state capital in 5 enterprises (F1) generated VND 157 billion from an initial value of VND 145 billion
Vietnam gears up for potential inflation impact in 2025

Vietnam gears up for potential inflation impact in 2025

For sound price management and inflation control, Deputy Prime Minister Ho Duc Phoc directed officials to vigilantly track both domestic and international market dynamics.
Mobile Version