Bank bond issuance soars 140 per cent amid debt crisis

Construction of a building near Ben Thanh Market by Viva Land, a subsidiary of Van Thinh Phat Group, stalled at the end of 2022 following the arrest of its chairwoman Truong My Lan. Real estate developers are struggling to meet repayment obligations due to a sluggish market. (Photo: vietnamnews.vn)

HCM City - Bank bond issuance has surged to 96.2 trillion VND this year, a surge of 140 per cent from last year, according to MB Securities (MBS).

The bonds have an average interest rate of 5.4 per cent and a maturity of four years.

Leading issuers include Techcombank (17 trillion VND), ACB (12 trillion VND), and MB (8.9 trillion VND).

The hike in bond issuance is expected to enhance the banks’ capacity for medium- and long-term capital, supporting credit in the second half of the year.

The real estate sector followed with 32.6 trillion VND in bond issuance at an average rate of 12 per cent, double the current savings rates.

Major players include Vinhomes (12.5 trillion VND), Vingroup (10 trillion VND), and Hai Dang Real Estate (2.5 trillion VND).

Total corporate bond issuance in Vietnam has surpassed 160 trillion VND this year, with nearly 11.8 trillion VND issued publicly and 148.9 trillion VND privately, data from the Vietnam Bond Market Association (VBMA) showed.

The number of corporate bond issuers, mainly real estate developers, struggling to meet repayment obligations is rising due to a sluggish market.

By the end of July, 116 companies had reported payment delays.

Novaland Group recently secured bondholder approval to restructure a 300 million USD convertible bond package due in 2026, which has a 5.25 per cent interest rate.

The company also extended the maturity of eight out of 17 NVL2020 bond batches, totaling nearly 3.11 trillion VND.

Late repayment has been a persistent issue, worsened by arrests of leaders at major developers such as Tan Hoang Minh Group and FLC Group, which have shaken market confidence.

The arrest of Truong My Lan, 68, chairwoman of Van Thinh Phat Group, in October 2022, marked a significant downturn for the financial market.

Analysts have warned the corporate bond market faces unprecedented challenges due to insufficient oversight from state agencies.

The total value of defaulted bonds is around 209.8 trillion VND, with the real estate sector accounting for nearly 70 per cent.

More than 95.3 trillion VND in bonds will mature in the second half of the year, with real estate accounting for 65 per cent of this amount.

BAC A BANK opens new bond issuance With the aim to diversify its investment portfolio and optimise the benefit of customers, BAC A BANK is offering 25.646 million bonds from January 30 to February 27.

AIIB invests $75 million in SeABank bonds The Asian Infrastructure Investment Bank (AIIB) on July 1 announced its latest investment of $75 million in the green and blue bonds issued by Southeast Asia Commercial Joint Stock Bank (SeABank, HSX: SSB).

AIIB to spend $75 million on green and blue SeABank bonds The Asian Infrastructure Investment Bank (AIIB) is commited to investing $75 million into green and blue bonds to be issued by Southeast Asia Commercial Joint Stock Bank (SeABank).