New real estate development projects in Thu Thiem urban area in Thu Duc city, HCM City. (Photo: VNA) The figure is a surge from 144.5 trillion VND last year and 271.4trillion VND this year, the report said.
According to the Vietnam Bond Market Association (VBMA), thefourth quarter of this year will see 65.5 trillion VND of bonds maturing, thehighest volume of matured bonds for all of 2023.
The last two months of the year will see over 41 trillion VND ofbonds maturing. Almost 80% of these maturing bonds are from the real estatesector.
Experts have warned the pressure of bond repayment will continuenext year as many issuers, mostly property developers, are grappling withcapital shortages and business difficulties.
Since August, the bond repurchasing value before maturity hasconsistently been lower than the matured value.
In October, companies repurchased 13.6 trillion VND, a 17.4%decrease compared to the same period last year, according to VBMA.
Financial challenges have led various enterprises to seeknegotiations with bondholders to extend bond redemption dates amid a sluggishproperty market and reduced cash flows.
According to data from the Hanoi Stock Exchange (HNX) by VNDirect,over 60 issuers have successfully negotiated to extend bond repayment dates,totaling 107 trillion VND as of October 27.
The Ministry of Finance has urged issuers to fulfill theirrepayment obligations and ensure timely payments.
The Government in March issued a decree which has allowed issuersto extend debt maturities by up to two years and use other assets for bondpayments, subject to bondholder approval.
As a result, over 42 trillion VND (1.77 billion USD) worth of corporatebonds were rolled over in the second quarter of the year.
Recently, major property firm Novaland has proposed using assetsfrom The Grand Manhattan project in downtown HCM City to settle outstandingdebt from three bond packages.
The firm also plans to use properties from luxury developments inBinh Thuan province to settle outstanding debt as it has overdue payments forseveral bond packages due in February and May with a remaining value exceeding 1.58trillion VND.
Local media have reported that nearly 70 companies have reporteddelinquencies amounting to 176.1 trillion VND, with the real estate sectormaking up the majority.
While extending bond maturity dates presents risks and challenges,such negotiations require agreement from all parties involved, includingbondholders, investors, and creditors.
Le Hoang Chau, Chairman of HoREA, pointed out that few bondholdersaccepted the option of receiving other assets for bond repayments, citingoverpricing and legal issues.
The corporate bond market has boomed in recent years due toincreased capital demand from property developers and banks.
However, market sentiment shifted unexpectedly in October of last yearfollowing the arrest of Van Thinh Phat Group’s chairwoman related to bondmarket fraud.
The real estate sector holds the largest outstanding bond value at396.3 trillion VND, or 33.8% of total bonds, as reported by S&P GlobalRatings.
Without improvement in the property sector, further defaults mayloom, warned the report.
Prime Minister Phạm Minh Chinh has ordered the State Bank ofVietnam and the Ministry of Finance, the two agencies primarily responsible formanaging bond defaults, to improve their management in a bid to revive thetroubled market./.
VNA
