In June 2024, bond issuance activities of real estate businesses began to become active again. Typically, the issuance of 2,500 billion VND by Vinhomes, 1,000 billion VND of Sun Group, 800 billion VND of Becamex, 600 billion VND of Thien Ha - Bang Duong Construction Investment Company Limited, 550 billion VND of Nam Real Estate Long. In addition, there are a number of issuances by An Hoa Construction Inspection Joint Stock Company, Trung Minh New Urban Area Company Limited, and Khai Hoan Land Group Joint Stock Company.
In terms of absolute value, real estate bond issuance has recovered compared to the same period last year, but the proportion has decreased sharply. However, the most worrying thing today is that real estate businesses face a huge maturity burden and the late payment rate in this field continues to increase rapidly.
In the first week of July 2024 alone, there were 9 businesses announcing delay in payment of bond principal and interest and changes in bond terms and conditions (mainly extending the bond term by 12-24 months).
Previously, in June 2024, many real estate businesses announced delayed payments or asked to defer bond debt . In the second half of 2024, it is estimated that there will be about 140,000 billion VND of bonds maturing, of which the majority are real estate bonds (nearly 59,000 billion VND), equivalent to 42%. This is also the bond group facing the greatest debt repayment pressure today. Real estate bond yields for high-risk groups facing financial difficulties can reach 20-30%, even up to 50%, mainly occurring with low-liquidity bonds.
According to VIS Rating, in July 2024, it is estimated that about 60% of the 9,000 billion VND of mature bonds at risk of not being able to repay principal on time are mostly from real estate businesses. In the next 12 months, about 18% of outstanding bonds with a total value of VND 207,000 billion will mature. VIS Rating estimates that 27% of bonds are at risk of not being able to repay principal on time, mainly in the residential real estate and construction industries. 65% of these bonds had delayed interest payments on previous bonds.
Experts from FiinGroup said that from the second half of 2023 until now, many real estate businesses will have difficulty with liquidity. Therefore, there are corporate bonds traded with yields that can be up to 20-25%. These are often businesses that are having difficulty implementing projects. Meanwhile, the financial pressure on them is relatively large in the next 12-18 months and the ability to refinance or raise new capital faces many challenges.
