Companies, especially property developers, are engaging in negotiations with bondholders to extend bond redemption dates amid a sluggish property market and reduced cash flows.

Less than 10 per cent of corporate bonds have been registered on the Hanoi Stock Exchange’s trading platform, falling behind schedule and prompting discussions on extending trading regulations.

A number of businesses have reported losses or profit decreases of up to trillions of dong after biannual reviews, though they had reported large profits before. But this was not a surprise, especially for real estate firms.

Businesses had bought back over VND145.2 trillion worth of bonds before maturity in the year to August 11, a 39% year-on-year increase, according to data from the Vietnam Bond Market Association (VBMA).

Vietnamese enterprises are issuing corporate bonds in the international market as they have found it difficult to mobilize capital domestically after a number of scandals. However, this has been the choice of only some large enterprises.

The value of corporate bonds issued in the first seven months of 2023 was much lower than in the same period last year. Many enterprises bought back bonds in large quantities before they became due.

According to the Finance Ministry, the corporate bond market of Vietnam remains relatively modest compared to others in the region.

The corporate bond market will continue to face headwinds in the second half of the year, experts said.

A staggering VND147.3 trillion worth of corporate bonds will fall due in the second half of the year, with nearly half (over VND72 trillion) owed by real estate firms.

The Ministry of Finance on July 19 organised an inaugural ceremony for a separate corporate bond trading system on the Hanoi Stock Exchange (HNX).

The operation of a separate corporate bond trading system is necessary to develop a transparent secondary market and increase liquidity for corporate bonds.

More than VND42 trillion ($1.77 billion) worth of corporate bonds were rolled over in the second quarter, providing issuers, mostly property...

Government bonds prospered again in the first five months of the year.

While real estate firms are still grappling with woes, including cash flow problems that have rendered them helpless to take back their bonds that are due, commercial banks have performed well.

Many local banks have bought back their bonds before maturity while others have launched new bond issues this month.

Bond issuers are grappling with the burden of heavy debt amidst unfavorable market conditions, leading them to further postpone coupon and principal payments.

After stagnating for half a year, the corporate bond market has shown signs of recovery following the implementation of Decree No 8, as the value and volume of issued bonds surged in March, said insiders.

Real estate firms and leading enterprises issued nearly one billion USD worth of corporate bonds within two weeks after the government released a decree, removing obstacles for enterprises.

A real estate firm has successfully raised funds by issuing VND4.7 trillion worth of corporate bonds. Just days before, another real estate firm also successfully issued VND2.3 trillion worth of bonds.

The proportion of corporate bonds to total assets of commercial banks is not too large but risks still exist, especially if banks hold bonds of weak real estate firms, according to Le Hong Khang from FiinRatings.