Local enterprises raised around 450 billion VND from their bond issues via private placements in the first quarter of 2014, lower than the quarterly average of last year, but experts forecast the market could improve later this year, according to the Saigon Times Daily.
According to the data the central bank’s finance and banking unit provided for the Daily, enterprises registered to sell nearly 5.2 trillion VND worth of bonds via private placements as of March 27, of which 450 billion VND worth had already been sold.
There were few transactions on the secondary market as businesses favoured the private placement method.
In 2013, Vietnamese firms issued an average of nearly 10 trillion VND each quarter, a record high for the corporate bond market.
Last year, the unit saw 82 applications for corporate bond issuance via the private placements with a total registered value of over 76.3 trillion VND. Of the figure, over 39.9 trillion VND was issued.
According to a report released by Bao Viet Securities Joint Stock Co. on April 2, Ocean Group Company (OGC) has announced to issue 980 billion VND worth of bonds via private placement this year. The three-year bonds carry a face value of 1 billion VND each.
The firm plans to offer the unsecured bonds to less than 100 investors at 1 billion VND each.
Kinh Bac City Development Shareholding Corp. (KBC) has announced to sell over 1 trillion VND worth of convertible bonds via private placement. The bonds carry a face value of 1 billion VND and a coupon of 1.5% per annum.
“We expect that the corporate bond market will improve next month due to some bond issuances. Corporate bonds are predicted to attract investors thanks to the interest rate difference of around 3.5 to 5 percentage points compared to government bonds with the same tenors,” Bao Viet said in the report.
As G-bond yields have plunged since November 2013, this type of bond has been less attractive. In addition, the value of G-bonds falling due between March and May was only 13 trillion VND, or 12% of the total that will fall due this year.-VNA
