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Vietnam Corporate bonds "break the ice": Real estate group accounted for more than 98%

On April 8, the Ministry of Finance said that in the first quarter of 2023, the volume of corporate bonds issued was 24,708 billion VND. In particular, the issuance volume accounted for 96% (VND 23,825 billion) since Decree 08/2023/ND-CP took effect on March 5.

While the period before Decree 08 was introduced, the number of corporate bonds issued was very modest. The corporate bond market was quiet when in February, only three lots of bonds were successfully issued, worth about VND 2,000 billion.
Read more: Corporate bonds ‘cooling down’ in September » Breaking News, Latest World News Updates - VietReader Viet Nam

According to the Ministry of Finance, the average interest rate and issuance term were 7.75 %/year and 2.37 years in the first quarter. In terms of structure, 98.2% of the issuance volume belongs to the real estate sector, and customers are mainly institutional investors, accounting for 99.99%, of which banks account for 77%.

Read more: A real estate company issued VND 770 billion bonds » Breaking News, Latest World News Updates - VietReader Viet Nam

Regarding the payment of bond debt and restructuring, in the first quarter of 2023, 69 enterprises were issuing late payments of principal and interest of corporate bonds with a total value of a late payment of about VND 19,200 billion. 23 issuers have plans to negotiate with investors and report to the Hanoi Stock Exchange (HNX) with a volume of about 9,600 billion VND (accounting for 50% of the late payment volume).

Previously, to remove difficulties for the corporate bond market, the Government issued Decree No. 08/2023/ND-CP dated March 5, 2023, amending, supplementing, and suspending the effect of several articles in the banking system. The Decree stipulates the private offering and trading of corporate bonds in the domestic market and the offering of corporate bonds to the international market.

According to Decree 08, the issuer is entitled to reach an agreement with the bondholder to pay the principal and interest of the bond due to maturity with other assets by the principles of compliance with the provisions of civil law and relevant laws. At the same time, it is allowed to extend the bond term up to 2 years from the bond issuance plan announced to investors.

The newly issued Decree also suspends regulations on determining the status of professional securities investors as individuals and regulations on credit rating results for bond issuers.

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