Corporate bond issuers persuade holders to wait for redemption

By Tat Dat   October 13, 2023 | 12:46 am PT
Corporate bond issuers persuade holders to wait for redemption
A bank employee counts Vietnamese banknotes at a bank in Hanoi. Photo by VnExpress/Giang Huy
More than 50 companies, most of them in the property industry and beleaguered by cash flow and other business problems, have reached agreement with bondholders to postpone redemption.

The bonds have a total value of VND95.2 trillion (US$3.9 billion) and their repayment has been deferred by two years, VNDirect Securities Corporation said.

In September, property developer Novaland and its subsidiaries reached an agreement with holders of their bonds worth VND1.145 trillion to extend the maturity term by two years to June-August 2025. They comprise three different issuances.

In September another developer, Hung Thinh, struck a similar deal to delay redemption of bonds worth VND9.2 trillion.

Bamboo Capital has delayed repayment of VND8 trillion worth of bonds.

Companies are resorting to extending the maturity of their bonds due to lack of funds and other business difficulties caused by the economic downturn.

The Vietnam Bond Market Association said they redeemed only VND9.2 trillion worth of bonds in September, less than a quarter of the actual maturity value and half the figure from 12 months earlier.

As of Oct. 3 a total of 69 firms had delayed bond interest or principal payments, according to the Hanoi Stock Exchange.

VNDirect estimated their debt at VND176.1 trillion, or 18% of the total.

It expected another VND53.8 trillion to become due in the fourth quarter, 44% from issuances by real estate companies and 40% from finance and banking firms.

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