Illustrative image (Source: VNA) Dataof the Vietnam Bond Market Association (VBMA) shows that in May, real estatebusinesses began to return to find capital on the bond channel and acceleratebond issuance in June. In May, realty businesses issued a total of nearly 6.9trillion VND (294.6 million USD) of bonds, then in June, the figure was morethan 7.5 trillion VND.
Itis estimated that from the beginning of this year to the end of June, realestate businesses issued a total of 152.4 trillion VND of bonds, of which morethan 94% were issued privately. Also during this period, VBMA said real estatewas the group of enterprises with the second highest bond issuance volume,after commercial banks.
Accordingto experts, bonds still account for a large proportion of the capital used forprojects of real estate enterprises, especially in the context that bank creditis under tight control.
Accordingto Nguyen Quang Thuan, Chairman and General Director of FiinGroup Joint StockCompany, the State Bank has recently moved to tighten real estate credit tolimit speculative activities and help the market become more transparent. Thepolicy of tightening credit makes it difficult for people and investors,especially real estate businesses, to access loans from banks.
Inthis context, realty businesses try to diversify and perfect the channels tomobilise capital for investment.
Thuansaid the bond channel was a good source of capital supporting businesses whenbank credit is not enough, adding that bond offering in private placementrequires a credit rating, which is an independent third-party assessment of thelevel of risk.
KBSecurities Vietnam Joint Stock Company (KBSV) said in the context of strictcontrol of credit in the real estate sector and strict supervision of corporatebond issuance, real estate businesses will find it more difficult to raisecapital in the next few quarters.
Inaddition to the two traditional capital mobilisation channels, which are creditand domestic bonds, listed real estate enterprises have also diversified theirsources of capital, accessing new channels such as investment funds, mergersand acquisitions (M&A) and international joint ventures.
Forexample, Novaland Group recently completed the sale of 250 million USD ofconvertible bonds and bonds with warrants to foreign partners. Dat Xanh Groupis expected to complete the issuance of 300 million USD of internationalconvertible bonds in the third quarter of 2022./.
VNA
