Property firms' bond issuances down 26 pct in H1

By Tat Dat July 12, 2022 | 08:17 pm PT

Housing projects in HCMC’s Thu Duc City. Photo by VnExpress/Quynh Tran

Property companies’ bond issuances were down 26 percent year-on-year in the first half of this year to VND42.6 trillion (US$1.82 billion) following the government’s orders to monitor them closely.

They accounted for 26 percent of all issuances, second only to the banking sector, according to data from the Vietnam Bond Market Association.

The fall would have been even bigger but for a $625-million global issuance by Vingroup, Vietnam’s biggest conglomerate.

Prime Minister Pham Minh Chinh has instructed financial regulators to prevent unlawful bond issuance practices, especially by property companies.

It followed the arrest of Do Anh Dung, chairman of property developer Tan Hoang Minh, for alleged violations related to the issuance of bonds worth over VND10 trillion.

Brokerage VNDirect Securities said corporate bond issuances would be strictly monitored in the "next few quarters."

Meanwhile, the State Bank of Vietnam has also directed banks to tighten lending to the property sector.

Financial company FiinGroup said unlisted companies and those providing limited information would be mainly affected.

For listed companies however bonds remain one of the most effective means to mobilize capital amid banks’ tightening of credit, it said.

But it sounded a final warning: three-fourths of the VND189 trillion worth of bonds issued by property companies and are outstanding fall due between 2022 and 2024.