Difficult problem of real estate enterprises when calling for capital in bonds

Thousands of billions of VND in bonds are mobilized

Real estate businesses have returned to capital mobilization with many deals issuing bonds worth thousands of billions of VND. However, it is worth mentioning that the picture of business operations, debts as well as cash flow of these enterprises is very worrying.

One of the notable deals was that in May, Viet Minh Hoang Real Estate Investment Construction Joint Stock Company (VMH) successfully issued a bond lot worth VND3,466 billion, with a term of 5 years.

FiinRatings' credit rating report to VMH shows that the company's business capacity is average. Although established in 2010, VMH's activities have only focused on developing a real estate project in Hanoi. The company's asset size is also currently lower than the industry average.

According to FiinRatings' estimate, VMH's plan to double the size of assets compared to the end of 2024, while significantly increasing debt will put pressure on the company's operational efficiency in the coming time.

Another case is TCO Real Estate Consulting and Trading Joint Stock Company, which also issued a bond lot worth VND5,000 billion on June 25. Previously, TCO successfully mobilized VND3,000 billion through individual bonds in April 2025 and VND2,500 billion on the last day of 2024.

Thus, in the past 6 months, this real estate enterprise has mobilized VND 10,500 billion through 3 short-term bond issuances. Information about bondholders and issuance purposes was not disclosed.

According to the latest financial information on HNX, by the end of 2024, TCO's equity reached VND 1,209.3 billion, down slightly from VND 1,1332.4 billion last year. Notably, total payables increased from more than VND 5,093 billion at the end of 2023 to more than VND 11,984 billion at the end of 2024. The debt/equity ratio for owners increased from 4.5 times to 9.9 times.

Also according to HNX's announcement, on June 25, An Thinh General Trading Service Company Limited (An Thinh Company) successfully issued a bond lot worth VND5,000 billion with a term of 18 months. This is an unconverted bond lot, without a certificate and secured by assets.

The 2024 financial report shows that this enterprise continues to lose 13.2 billion VND after tax, although this figure has improved significantly compared to the loss of 43.9 billion VND in 2023. As of December 31, 2024, the company's total accumulated loss was still at negative VND 57.8 billion.

Tightening the leverage ratio when issuing bonds

According to the Law amending and supplementing a number of articles of the Law on Enterprises recently passed by the National Assembly, from July 1, 2025, non-public companies must have a total debt payable when issuing individual bonds (including the value of the bonds expected to be issued) not exceeding 5 times their equity.

Experts also highly appreciate the above regulation. Dr. Nguyen Duy Phuong - Director of Strategic Investment of DG Capital - said that the new regulation will affect the group of businesses that rely heavily on loans, especially real estate businesses. For a long time, real estate businesses have used high financial leverage, long capital recovery time and depend heavily on individual bond channels.

With the new regulation, businesses will have to restructure capital mobilization strategies in a more sustainable direction. However, in the medium and long term, tightening the leverage ratio will be very positive for the market, as well as the capital restructuring activities of enterprises.

However, Dr. Phuong also gave another perspective, which is a reality that shows that high leverage rates are not the main cause of late bond repayment. According to VIS Rating data, the reason for 182 enterprises' current bond repayment delays is not due to high leverage, but mainly due to weak cash flow and weak liquidity management.