Attractive interest rates, low risk
Recently, the corporate bond market has had new changes with more positive signs, with a notable highlight coming from the group of commercial banks when they continuously had outstanding issuance volumes. compared to other industries.
According to the Ministry of Finance, in the first 7 months of the year there were 183 individual issuances of corporate bonds with a total mobilized value of 174,000 billion VND, an increase of 2.78 times compared to the same period last year. In particular, banking is the industry with the largest issuance proportion with a total value of 136,500 billion VND, accounting for 68.2% of the total issuance value of the entire market. Bank bond interest rates with a term of 5-10 years also reach 6-7%/year, even BVBank's bonds with a 6-year term have an interest rate of up to 7.9%/year.
With attractive interest rates, investing in bank bonds is considered a potential investment channel in the context of deposit interest rates being the lowest in many years.
The research report "Yield curve and history of late bond payments based on credit rating" recently published by FiinGroup pointed out the trend of yield difference between bank bonds and deposit interest rates. fluctuates between 2.0 - 2.5% depending on the term.
Overall assessment of bank bonds, FiinGroup experts say that bank bonds are low risk and highly appreciated by the market. The reason is that most commercial banks plan to increase capital to meet the need for credit growth at 14-15% this year, or meet capital safety regulations.
Banks are money trading organizations, whether the purpose of issuing bonds to restructure existing debt to optimize capital structure, or to support businesses in debt restructuring or new lending, depends on the quality of the loan. Loans are still well controlled.
Forecasting the market outlook, Mr. Tran Phu Viet - Head of Research and Product Development of FiinGroup Financial Data Department - commented that in the coming time, bank bonds will still be the key group leading the market. market, with about 70% of issued value in the second half of 2024. Meanwhile, real estate bonds began to recover thanks to a number of projects making legal progress and infrastructure bonds showing signs of improvement.
It is forecast that issuance volume will continue to increase and maturity pressure will decrease
From the beginning of the year until now, the banks issuing the largest issuance value include: ACB (23,800 billion VND), MBBank (23,300 billion VND), Techcombank (17,000 billion VND). From the beginning of August until now, the market continues to record notable issuances from banking groups such as: Agribank successfully issued 10,000 billion VND, 120-month term, 6.7% interest rate; OCB issued a batch of 5,000 billion VND bonds, term 24 - 36 months, interest rate 5.6%; MBBank with 4,000 billion VND, 36 month term, 5.5% interest rate,...
According to MBS Research's forecast, corporate bond issuance activities will be more exciting in the fourth quarter of 2024 when businesses' capital needs recover, the real estate market begins to warm up, as well as the need to expand. Economic production is actively following the recovery momentum of the economy.
“Banks will continue to promote tier 2 capital issuance to meet lending needs. From the beginning of the year to mid-July 2024, credit increased by 5.3%, higher than 4.5% in the same period last year. Credit is forecast to accelerate in the final months of the year following the strong recovery of the economy. production, export and services,” said MBS Research expert.
Meanwhile, the value of corporate bonds bought back before maturity is estimated at more than 2,400 billion VND, down 93% compared to the previous month, of which the banking group accounts for 44%, the real estate group accounts for 9%. Accumulated from the beginning of the year until now, about more than 110,300 billion VND of corporate bonds have been bought back before maturity, down 34% over the same period.
Notably, the pressure on bond maturity will decrease in the last months of the year: “We estimate that about VND49,400 billion and VND34,600 billion of corporate bonds will mature in the third and fourth quarters of 2024, respectively, much lower than the peak this year of VND69,100 billion in the second quarter,” said an MBS Research expert.
