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Friday, June 21, 2024

Number of companies delaying bond repayments rises

By Nguyen Tan

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HCMC – Nearly 70 companies have been added to the list of enterprises that have delayed payment of both interest and principal on corporate bonds as of today, totaling around VND160 trillion, according to the Vietnam Bond Market Association (VBMA).

Outstanding corporate bonds have reached VND1.15 quadrillion so far, which is equivalent to nearly 15% of the nation’s GDP. This figure is considerably lower than that of other developing countries in ASEAN, with Malaysia at 56% of GDP, Singapore at 38% of GDP, and Thailand at 25% of GDP.

Businesses are facing challenges in raising funds and issuing corporate bonds to the market, with a significant decrease in both the number and value of corporate bonds issued over the past few years.

In addition to difficulties in local and international markets, administrative hurdles such as prolonged approval procedures for bond issuance documents and issues related to listed corporate bond documents have posed challenges to issuers.

Bond issuers are grappling with low liquidity due to substantial amounts of outstanding corporate bonds set to mature in the final months of this year and next.

As of today, outstanding corporate bonds have totaled VND160 trillion, constituting 14.4% of privately placed corporate bonds in the market.

Statistics indicate that the total value of privately placed corporate bonds maturing in the final quarter of this year is estimated at VND104 trillion. Among these bonds, VND37 trillion is issued by real estate companies, VND24 trillion by credit institutions, VND1.3 trillion by manufacturing firms, and more than VND42 trillion by other service and trading businesses.

The total value of corporate bonds issued through private placement and falling due in 2024 and 2025 is estimated at VND288 trillion and VND194.2 trillion, respectively.

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