Phu Hung Securities Company (PHS) has just released a report on the bond market showing that the amount of corporate bonds maturing in the fourth quarter of 2024 is expected to exceed VND87.5 trillion, with 35% coming from the real estate group and 15% from the banking group.
Notably, high risks are concentrated in the real estate bond group, especially in October and November, experts from Phu Hung Securities Company commented.
In September, many big companies such as Hoang Anh Gia Lai continued to delay paying interest and principal of bonds up to VND4,500 billion; Novaland delayed paying a total of more than VND800 billion in interest and principal; Duc Long Gia Lai is at risk of being delisted on the HNX with a remaining bond debt of about VND70.4 billion...
Experts from Phu Hung Securities Company commented that the high maturity pressure will force many businesses to continue to reissue to raise capital in the fourth quarter of 2024.
Therefore, bond issuance and repurchase activities will continue to be active in the coming time.Interest rates are expected to remain high, especially for real estate businesses.Meanwhile, interest rates of the banking group may increase slightly when they have hit rock bottom and mobilization interest rates have increased again.
"We also maintain the view that the maturity pressure of the real estate group, accounting for a large proportion of the total value of bonds maturing and overdue in the fourth quarter of 2024, will be a risk factor for the corporate bond market, especially if the real estate market does not recover as expected," PHS commented.
Credit rating company VIS Rating commented that real estate businesses have low debt repayment capacity, reflected in a very high debt/equity ratio, a shortage of cash resources/maturity bond value, and low profit margin before tax, depreciation and interest (EBITDA) compared to other issuers.
In the next 12 months, about 20% of the total value of VND259,000 billion of bonds will mature with a high risk of late payment; 90% of them have been late in paying bond interest at least once and the enterprises have high leverage ratios, low cash resources and low EBITDA margins.
A problem that is being raised now is that, after the Government issued Decree 08/2023/ND-BTC allowing enterprises to extend and postpone debt for 2 years, by 2025, many bond lots will have expired the extension and postponement period.
So what is the next course of action if the issuing organization still cannot arrange the cash flow to pay the debt?Especially real estate businesses have not been able to recover their "health".
Dr. Nguyen Duy Phuong, Investment Director of DG Capital, said that to promote the handling of bad debt bonds, removing legal bottlenecks for real estate projects plays a leading role.On the one hand, banks can disburse capital so that projects can be implemented, and products can be sold on the market to collect money; on the other hand, the issuing organization can propose options to convert bonds into real estate.
In addition, there is a need for more solutions to stabilize and unblock capital flows in the corporate bond market to reduce pressure on medium and long-term credit capital in the banking system. Agencies, ministries, sectors and localities should speed up the approval and adjustment of planning to support real estate businesses.
