An investor holds corporate bonds. (Photo baogiaothong.vn) According to MB Securities, over 183.5 trillion VND (7.8 billionUSD) of corporate bonds were issued in the first six months of the year,down 10% year-on-year. Of which, just 5.3 trillion VND went to investorsthrough public offerings.
The second quarter saw 112.8 trillion VND of corporate bondsoffered to the financial market, also 10% lower than the same periodlast year.
Six-month weighted average maturity (WAM) was 3.2 years, roughly0.69 years less than the figure in 2021. Average bond interest ratesstayed at 6.4%, around 1.7 percentage points short of last year's number.
Among the largest issuers, the banking sector took the lead with atotal six-month issue of 90.1 trillion VND and a WAM of 3.76 years. Ofwhich, banks offered 80.7 trillion VND worth of bonds in Q2 alone.
The realty sector came next with about 10.8 trillion VND in Q2.The figure paled in comparison with its total issues in early 2022,which hit 44.5 trillion VND and had a WAM of 2.45 years.
Other sectors made up 48.8 trillion VND of the totalcorporate bond on sale in the first half of 2022. Notably, constructionfirms offered 17 trillion VND with a WAM of 2.27 years.
FinnPro's data showed that about 2.8 trillion VND of corporatebonds were issued in the first half of August and the banking sector remainedthe largest issuer.
Vietcombank took the biggest share of the pie with 1.5 trillion VND,followed by Agribank with 600 billion VND and ACB with 300 billion VND.
VietinBank and VietCapital Bank also got in on the act with 50billion VND and 60 billion VND, respectively.
Most issuers employed private placement to raise bond moneysince public offerings require high costs and high standards. For thatreason, the latter involves banks only.
Financial expert Nguyen Tri Hieu underscored capitalexpansion as the main reason for banks to issue such large volumes ofbonds.
Banks had to raise the proceeds, he believed, to consolidatetheir financial ratios and deepen financial buffers amid a period of mountingcredits that outpace their equity.
Another reason for banks overwhelming the bond market is thatloan restructuring specified by Circulars No 01, No 03 and No 14has caused some cash flows to not return to banks in the short term.
Banks had no other choice but to issue bonds to make up for thelate-returned cash flows.
The State Securities Commission has recently announced thatissuers, which are not public companies, will issue privately-placed bondsunder the guidance of the Law on Enterprise and Decree No 153.
That means they are held responsible for their ownissuance and no pre-issue registrations, approvals or official notificationsare required.
The commission also stressed that onlyprofessional investors are eligible to purchase privately-placed bonds andthe investors take responsibility for their own investing decisions./.
VNA
