Significant pressure on corporate bonds maturing in 2024

The pressure of corporate bonds maturing in 2024 remains significant, with many businesses needing to pay trillions of Vietnamese dong in bonds that are due for investors.

According to the latest data compiled by the Vietnam Bond Market Association (VBMA), the Hanoi Stock Exchange (HNX) and the State Securities Commission, as of the information release date of February 23, 2024, the total value of corporate bonds due in the remaining part of this year is 258.2 trillion VND (10.5 million USD). Among them, 38% of the bond value nearing maturity belongs to the real estate group, approximately 99.2 trillion VND, followed by the banking group, reaching nearly 54.4 trillion VND and accounting for 21%.

According to the data published on HNX, there will be a series of bonds worth trillions of Vietnamese dong maturing in 2024, including many large-value bonds issued by non-listed or newly established real estate companies.

One example is the bond series SDICB2124001 of Saigon Investment and Development Corporation (SDI Corp) with a total face value of 6.5 trillion, which will mature on December 15, 2024. This is also the largest maturing bond series this year.

Another bond series, GHICB2124001, with an issuance value of 5.76 trillion VND issued by Golden Hill Investment Corporation, will mature on April 15, 2024. The bond series NAN12301, with an issuance value of 4.7 trillion VND by Nam An Investment and Trading Corporation, will mature in September 2024.

The Dai Phu Hoa Joint Stock Company also has a bond series worth 3.56 trillion VND maturing in December 2024. Two bond series, HYD22301 and HYD22302, issued by the Hung Yen Urban Investment and Development Limited Liability Company, with respective issuance values of 4.45 trillion VND and 2.75 trillion VND, will mature in March this year.

According to the estimation of VNDIRECT Securities Corporation (VNDIRECT), the pressure of corporate bonds maturing in 2024 remains significant, with a total value of individual corporate bonds maturing in 2024 at around 207 trillion VND, a 3% decrease compared to 2023. Among them, 59.3% belong to real estate companies. Additionally, there are still many issuing organisations facing difficulties in paying off matured bond debts.

In February 2024, there will be approximately 1.8 trillion VND of individual bonds maturing. This is one of the months with the lowest value of individual bonds maturing in the year, but the pressure of maturing bonds will increase again in March.

Regarding issuance activities, experts from VNDIRECT observe that Government Decree 08/2023/ND-CP on amendment and cancellation of certain provisions in decrees regulating the issuance and trading of individual corporate bonds in the domestic market and the issuance of corporate bonds in the international market, has now expired, and the enforcement of regulations on professional securities investors and mandatory credit ratings is one of the main reasons for the sharp decline in private placement activities.

According to VBMA, as of February 23, the total value of corporate bond issuances recorded since the beginning of the year is 5.35 trillion VND, with two public issuances totaling 2.65 trillion VND, accounting for 49.5% of the total issuance value, and four private issuances totaling 2.7 trillion VND, accounting for 50.5% of the total.

Regarding buyback activities, according to VBMA, businesses repurchased 1.59 trillion VND worth of bonds in February. From the beginning of the year until now, the total value of bonds repurchased before maturity reached 9.13 trillion VND, a 43% decrease compared to the same period in 2023. The real estate sector leads the way, accounting for 59% of the total value of bonds repurchased before maturity (equivalent to approximately 4.47 trillion VND)./.