Property companies under the scanner, stop issuing bonds

By Phuong Dong May 9, 2022 | 07:07 pm PT

Apartment buildings are seen at Linh Dam Urban Area in Hoang Mai District, Hanoi. Photo by VnExpress/Nhat Quang

Property companies’ bond issuances came to a complete halt last month following the government’s orders to the central bank to monitor them closely.

In the year to date, real estate companies have issued bonds worth VND28.85 trillion or 37 percent of the total money raised in the market.

But of the 23 issuances in April worth around VND16.47 trillion (US$717.76 million), 91 percent were by banks and the rest by the energy, transportation, manufacturing, and financial sectors, according to the Vietnam Bond Market Association (VBMA).

Property companies dropped out of the running after Prime Minister Pham Minh Chinh tasked the Ministry of Finance and State Securities Commission with precluding unlawful issuance practices, especially by property companies.

He also instructed the State Bank of Vietnam to monitor credit institutions’ investments in corporate bonds and support for bond issues.

"The focus should be on companies with large bond issuances, high interest rates, unfavorable business results, and [issuances] without guarantees," his directive stated.

It came on April 7, two days after the Ministry of Public Security detained and prosecuted Do Anh Dung, chairman of property developer Tan Hoang Minh, over violations related to the issuance of bonds.

Around 29 percent of their bonds are unsecured or secured only by shares, according to the VBMA.