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Tuesday, June 25, 2024

Real estate businesses concerned about bond maturity

The Saigon Times

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HCMC – Real estate companies are coming under pressure as an estimated VND213,521 billion worth of bonds, 37% of them belonging to the real estate sector, will fall due in the rest of this year, according to the Vietnam Bond Market Association (VBMA).

Most of the real estate bonds will fall due in the second and third quarters of this year.

In the year to date, businesses have issued VND10,715 billion worth of bonds, a year-on-year decrease of 61.5%. Some VND6,400 billion of this amount comes from the real estate sector.

Given weak cash flows, big debt and limited resources for repaying maturing debt, pressures are mounting on bond issuing real estate businesses. However, the amount of bonds falling due this year is still much lower than the VND147 trillion of bonds with delayed payments of principal and interest last year.

Currently, many real estate firms have proactively bought back bonds before maturity. However, the total value of bond buybacks has reached only VND18,278 billion, down by 38.4% versus the previous year.

The real estate sector still leads the way, with 45.1% of the total value of bonds repurchased before maturity, making up VND8,250 billion.

Experts said the corporate bond market in the first quarter of this year remains subdued due to the continuation of the trend from 2023 and incidents caused by large corporations greatly eroding investor confidence in the market.

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