Breaking the ice in the bond market this year?

After the major violations and prosecutions in 2022 such as the Tan Hoang Minh and Van Thinh Phat - SCB cases, the corporate bond market was almost frozen from Q3/2022 to Q2/2023 due to investor loss of confidence. However, since June 2023, the market has recovered from the bottom.

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According to the latest report from FiinRatings as of February 5, 2024, the corporate

bond market

recorded 4 issuance transactions with a total value of 6,450 billion from 4 companies.

These companies include: Ho Chi Minh City Infrastructure Investment Joint Stock Company (CII) issued 2,800 billion dong of convertible bonds, with a term of 10 years and an interest rate of 10% per year for the first 4 quarters, and then floating with a higher interest rate of 2.5% above the reference interest rate. The bondholders have the right to convert to shares at a price of 10,000/shares.

Transport Investment and Development Corporation, a non-public company, successfully issued 450 billion dong of private bonds with a term of 3 years and an interest rate of 6.5% per year.

Corporate bonds are gradually recovering.

Ninh Thuan BOT One Member Limited Liability Company issued 1,200 billion dong of private bonds with a term of 9.75 years and an interest rate of 10.5% per year.

Among them, notable is the bond of CII with the feature of convertible to shares, which attracted the participation of more than 4,000 individual investors in the country, accounting for 80.14% of the total offering quantity.

Compared to the periods of 2021 and 2022,

the bond market

is very active with a total issuance value of 10,400 billion dong (2021) and 19,700 billion dong (2022), the total successful offering value in January 2024 is still relatively modest.

Based on the current information disclosure, noting the plans of some companies to issue bonds in the near future including mainly

banks

such as HD Bank, VietBank and two companies in the

real estate

industry including Vingroup and Investment and Development Corporation (DIG). The total issuance value is over 10,000 billion dong.

Assessing the market prospects for 2024, although it is very difficult to forecast the expected issuance value for the whole year of 2024, FiinRatings still believes that the prospects for

fundraising channels

of corporate bonds in 2024 will be

more active

than in 2023.

According to Moody’s forecast, in 2024, the Vietnamese corporate bond market will develop in a more disciplined and tighter direction,

confidence in the market

will continue to recover.

SaigonRatings believes that the bond market has bottomed out and started to show signs of recovery with the impact of positive factors such as clear signs of economic recovery when it was assessed as “soft landing” and entering a more stable new growth cycle, increasing investment capital demand, forecasted high economic development, the return of confidence of many investors…

In 2024, to serve the strategy of land fund creation and project development, real estate companies need to mobilize a large amount of capital, of which bonds are still one of the priority channels. However, for many companies, the plan to continue issuing bonds is calculated very carefully.

SOURCEcafef
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