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Businesses grapple with mounting debt obligations

The Saigon Times

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HCMC – Businesses are facing the daunting task of repaying over VND20,000 billion worth of corporate bonds in the final month of this year, while also preparing to meet obligations worth hundreds of billions of dong next year.

A VNDirect report said that around VND20,200 billion in corporate bonds are set to fall due this month, significantly higher than in the previous two months.

The pressure from corporate bond repayments is expected to intensify during the first two months of next year, with an estimated VND34,500 billion worth of corporate bonds scheduled to reach maturity by April 2024.

Supporting this perspective, FDIT, an investment consultancy firm, predicted that the coming year would see over VND297,000 billion in bonds falling due, the highest in recent years and a three-fold increase compared to 2020.

The report further highlights the real estate sector as the largest contributor, accounting for more than VND123,000 billion of corporate bonds due in the upcoming year.

According to VNDirect’s data, the buyback of corporate bonds before maturity is on the decline. In November, businesses bought back about VND5,000 billion worth of bonds, down by 72% over the previous month.

Faced with these financial constraints, numerous enterprises have initiated negotiations with bondholders to extend bond redemption dates. As of November 27, the Hanoi Stock Exchange (HNX) reported that 64 businesses had successfully negotiated with bondholders to extend their bond repayments, totaling more than VND111,000 billion.

In the first half of this month, businesses have continued to reach agreements with bondholders to secure extensions for bond repayments, interest rate reductions, deferred interest payments, and principal repayment postponements, with a combined value exceeding VND8,100 billion.

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