The recovery of private corporate bond issuance in the third quarter of 2024 continues to come from increased issuance by the banking group.
According to data reported by VNDirect Securities Company, in the third quarter, the banking group issued VND119,307 billion in individual corporate bonds, accounting for 81% of the total value of issued corporate bonds.
The issuance activities of the real estate group in the third quarter of 2024 also improved with the total value of individual corporate bonds issued reaching VND 20,895 billion, accounting for 14.2% of the total issuance value, up 41.8% compared to the previous quarter, but still 40.2% lower than the same period.
According to VNDirect's observations, negotiations to extend bond terms between issuers and bondholders are still active in the third quarter of 2024.
As of October 15, more than 100 issuers have reached agreements to extend bond terms with bondholders and have officially reported to HNX. The total value of bonds with extended terms is more than VND156,000 billion.
After cooling down slightly in the third quarter of 2024, VNDirect experts found that maturity pressure will increase sharply again in the fourth quarter of 2024 with an estimated more than VND 76,700 billion of individual corporate bonds maturing, an increase of 99.1% compared to the third quarter of 2024.
The real estate group is the group with the largest proportion, accounting for 35.8% of the total value of bonds maturing in the fourth quarter of 2024. Meanwhile, the banking group may still maintain issuance in the fourth quarter of 2024.
In the third quarter, this group actively bought back bonds with remaining maturity of less than 1 year, along with actively issuing long-term bonds to reduce the ratio of short-term mobilized capital and increase the ratio of long-term mobilized capital.
In the context of the still large pressure on bond maturity, there are many opinions related to the adjustment not allowing individual investors to invest in privately issued bonds of enterprises other than credit institutions.
Recently, the Vietnam Chamber of Commerce and Industry (VCCI) has issued a petition, in which it is stated that this restriction could cause congestion and disruption in the corporate bond market. Currently, organizations investing in corporate bonds (such as commercial banks, securities companies, insurance companies, investment funds) are facing many restrictions on bond investment regulations.
Therefore, individual investors are still one of the major investors that can absorb corporate bonds. If these investors are limited, it will be difficult for enterprises to issue more because there are not enough investors in the market to absorb the amount of bonds issued.
Besides, restricting individual investors will affect the ability to mobilize capital and the solvency of enterprises.
Individual investors are almost the only investor group that can invest in private bonds for debt restructuring purposes.
In the coming period, businesses will need to mobilize capital to restructure maturing debts or restructure debts with high capital mobilization costs (estimated at about VND 543,000 billion in the next 4 years).
Therefore, businesses will be greatly affected in raising capital to restructure debt, which can strongly affect liquidity in the next 3-5 years.
