According to a report from MBS Securities Company, the value of corporate bonds issued in December 2024 is estimated at VND 68,700 billion, up 88% compared to November and up 5% compared to the same period last year. Accumulated for the whole year of 2024, the total value of corporate bonds issued reached more than VND 472,000 billion, up 49% compared to 2023.
This shows that after a period of confidence crisis that caused a sharp decline in issuance scale in 2022 and a slight recovery in 2023, there was a stronger improvement in 2024.
The banking sector plays a key role in the recovery of the bond market. Of the Top 10 enterprises with the largest issuance value in 2024, 9 are from the banking sector.
Following banks is the real estate and construction group, contributing 18.2% to the total amount of newly issued bonds in 2024.
The situation of late principal and interest payments on bonds in the second half of 2024 is also much lower than in 2023, ranging from VND10,000-15,000 billion/month. This trend is expected to continue to support the market next year, especially when the amount of maturing bonds is lower than in previous years, helping to create confidence for investors to return to the market.
It is noteworthy that early repurchase activities are taking place quite actively in the corporate bond market, focusing on the real estate sector.
For example, Nam Long Investment Corporation (stock code: NLG) announced information on the results of the early bond buyback. Accordingly, on December 25, 2024, NLG bought back the entire VND500 billion of bond lot NLGH2229001 and VND500 billion of bond lot NLGH2229002. Both of the above bond lots were issued in 2022, with a term of 7 years.
Novaland's Board of Directors also approved the plan to buy back all 21 bonds issued in 2020 with a total face value of VND7,000 billion. These bonds initially had a term of 36 months (3 years), but Novaland later negotiated to extend it to 60 months, with principal and interest payments due in June 2025.
Regarding other bond packages, Novaland said it is negotiating with bondholders and implementing measures to fulfill obligations, in order to ensure the rights of bondholders in the context of the real estate market still facing many difficulties.
In addition, the market also recorded a series of businesses trying to buy back many smaller-scale bond lots before maturity.
VIS Rating senior analysts said that real estate businesses - the group with many overdue bonds - recorded many positive points. The real estate market has gradually shown signs of recovery along with positive signals from many real estate projects gradually removing legal obstacles to be able to continue construction and hand over products to customers.
From that positive base, housing supply and demand will improve in 2025, boosting cash flow and profits of real estate companies, thereby improving their credit profiles, creating conditions for businesses to have more funds to repay bond debt.
Dr. Nguyen Duy Phuong, Strategic Investment Director of DG Capital, commented that the riskiest period of the corporate bond market has passed, especially when new legal regulations are applied, helping the market become more transparent and sustainable. The stable savings interest rate level of 4-5%/year also promotes the shift of cash flow from investors to investment channels with higher yields.
"In addition, good economic growth will also lead to expectations of a recovery in business operations of enterprises, thereby helping to improve the asset quality of enterprises and being the basis for investors to increase their confidence in the corporate bond market," Dr. Phuong stated his opinion.
