Real estate firms dominate bond issuance in January

Illustrative image (Source: VNA)

SSI’s statistics showed that real estate firms issued bonds worth 7.36 trillion VND (317.2 million USD) in January, accounting for 55 percent of the total value of corporate bonds issued in the market.

In comparison, the value of corporate bonds issued by banks in January accounted for just 2.1 percent of the total issuance value, while energy and mining firms 2.7 percent and infrastructure development firms 1.9 percent

Corporate bonds of real estate firms had average yields of 11.78 percent per year and average term of 4.98 years.

More than 7.36 trillion VND worth of corporate bonds issued in January came from only seven real estate companies.

Notably, Paradise Golf Development Joint Stock Company had the highest bond value issued in January, worth 2.68 trillion VND, with 10-year terms and average yield of 11.5 percent.

Among the seven real estate firms, City Garden Joint Stock Company issued bonds at the highest yield of 13.3 percent per year.

Other issuers were APEC Land Hue, Cu Lao Cham Trading-Tourism and Investment Joint Stock Company, Phu Thuong Construction and Investment Joint Stock Company, Phu Hung Real Estate Investment Company and TNR Holdings.

Real estate firms tended to issue bonds as a channel to raise capital as credit in the property sector was being tightened.

As the corporate bond market was overheating in recent years, the Ministry of Finance was planning to make regulations on corporate bond issuance more stringent, including regulations related to conditions for corporate bond issuance, rates, issuance approach in domestic and international markets, information disclosure and reporting mechanism.

Statistics from the Hanoi Stock Exchange showed that 211 firms issued bonds worth a total of 280 trillion VND in 2019, up by 25 percent compared to 2018.

The scale of Vietnam’s corporate bond market expanded from 9.01 percent of the country’s gross domestic product (GDP) in 2018 to 11.3 percent GDP in 2019 with a total of nearly 670 trillion VND worth of corporate bonds in circulation.

SSI’s statistics showed that the total corporate bond value issued by real estate firms in 2019 reached 106.5 trillion VND, or 38 percent of the total issuance value, only after banks.