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Success rates for bond term negotiations quadruple

The Saigon Times

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HCMC – Negotiation success rates for extending coupon payments quadrupled to 63% in October from a mere 16% in February, said Nguyen Hoang Duong, deputy head of the Banking and Finance Department at the Ministry of Finance.

Duong presented these statistics at a conference on promotion of a sustainable bond market, organized by the Vietnam Government Portal on December 4. Around 40% of the bond volume issued by 68 businesses with delayed payments has undergone successful negotiation, he added.

The remarkable surge in negotiation success can be attributed to proactive bond repurchases by issuers. This has been facilitated by the provisions of Decree 08, which empowers businesses and investors with mechanisms for negotiation, extension, deferral, and bond conversion.

In another positive trend, the Ministry of Finance reported that 77 businesses issued bonds worth a total of VND220 trillion in November alone, signaling renewed confidence and dynamism in the market.

However, despite these positive developments, economist Can Van Luc said that Vietnam’s role in the regional bond market remains relatively low, accounting for only 13%, compared to 27% in Thailand and 22% in the Philippines. Luc stressed the need for quality improvements in the bond market, particularly in terms of standards and managerial capabilities among issuing organizations.

Nguyen Anh Phong, general director of the Hanoi Stock Exchange, said Vietnam’s corporate bond trading system had had positive impact since it became operational on July 19. This system has contributed to a positive shift in primary market activities.

Since July, bond issues have exceeded VND180 trillion, a fivefold increase compared to the first half of the year. Luc attributed the bond market’s recovery to the effectiveness of recent policies, noting that businesses issued VND240 trillion worth of bonds, with corporate bonds issued via private placement accounting for VND220 trillion.

In November, the issuance volume was 15 times higher than in the same period the previous year, reaching VND30 trillion. “While obstacles persist, the market is actively recovering, with restored confidence. These are signs contributing to a better-developed market,” Luc said.

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