Real estate firms flock back to bond market

By Anh Tu   October 18, 2023 | 09:45 pm PT
Real estate firms flock back to bond market
A bank employee counts Vietnamese banknotes at a bank in Hanoi. Photo by VnExpress/Giang Huy
Realty companies issued bonds worth VND29.85 trillion (US$1.24 billion) in the third quarter, the most in almost two years and accounting for 32.1% of the bond market.

Capitaland Tower Company alone accounted for VND12.2 trillion of them, according to VnDirect Securities Corporation.

Other major issuers were Lan Viet Real Estate Company (VND4.1 trillion), BIM Real Estate Company (VND2.33 trillion) and Tan Lien Phat Tan Cang Real Estate Company (VND2 trillion).

Real estate companies had issued bonds worth VND24 trillion in the first quarter of this year and less than VND4 trillion in the second.

The Vietnam Bond Market Association said most issuances in the third quarter carried coupon rates of 12-15%, while the overall average this year is around 9%.

According to realty firm Dat Xanh Services, the third quarter issuances are likely to be used for restructuring debts and rolling over debts since real estate supply has been thin this year and the absorption rate and buyers’ confidence remained low.

More than 50 companies, most of them in the property industry and beleaguered by cash flow and other problems, have reached agreement with bondholders to delay redemption.

The bonds have a total value of VND95.2 trillion and their repayment has been deferred by two years, VnDirect Securities Corporation said.

According to the association, bonds totaling VND61 trillion, with the real estate sector accounting for more than VND24 trillion, will become due in the fourth quarter.

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