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VND330 trillion worth of corporate bonds to fall due next year

The Saigon Times

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HCMC – The HCMC Real Estate Association (HoREA) has forecast that an estimated VND329.5 trillion worth of corporate bonds will fall due next year.

This will be the highest level in three years, far surpassing the figures of VND144.5 trillion in 2022 and VND271.4 trillion in 2023, HoREA said in a letter addressed to the Ministry of Finance on November 9.

HoREA highlighted the fourth quarter of 2023 as a peak period for bond repayments this year, with a total value of VND65.5 trillion, excluding deferred and postponed bond lots. Notably, nearly 80% of these bonds were issued by real estate firms.

In its letter, HoREA also called for the extension of Government Decree 08/2023, emphasizing its importance in supporting the corporate bond market in 2024.

This decree temporarily suspends some articles of Decree 65/2020 until December 31 this year, which requires professional individual investors to hold an investment portfolio worth at least VND2 billion for 180 days or longer and debt-issuing organizations to report their credit ratings and sell their bonds within 30 days.

It has had a positive impact on the corporate bond market by addressing challenges, particularly in bonds issued via private placement. It has contributed to the ongoing recovery of the economic and real estate markets.

Between January and October this year, nearly VND205.9 trillion worth of corporate bonds were issued in the market, with privately placed bonds accounting for 88.5% of the total, exceeding VND182 trillion. Approximately 33.2% of the total bonds issued were by real estate firms.

HoREA said that the extension is necessary to accommodate the practical realities of Vietnamese businesses.

The potential challenges that may arise if the application of Decree 08/2023 is not extended include the stringent criteria for identifying individual professional investors and the difficulties faced by those selling bonds via private placement in meeting credit rating conditions.

With only four credit rating agencies serving over 800,000 businesses nationwide, including 40,000 in real estate, it is challenging to meet the demand for private corporate bond issuance.

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