Banks' bond issuance soars threefold in first five months

During this period, bank bonds constituted 67.1% of the total issuances, overshadowing the real estate sector, which accounted for only 20.8%.

The figure marks a staggering 3.3-fold increase compared to the same period last year, reflecting a robust demand for financing in the banking sector.

According to the Vietnam Bond Market Association (VBMA), May alone witnessed 42 bond issuance events, totalling approximately 46.77 trillion VND. This represents an increase of 2.8 times over the same period last year, when bond issuances amounted to just 16.7 trillion VND.

Cumulatively, the total value of corporate bond issuances in the first five months of the year reached 120.68 trillion VND, with public offerings accounting for 27.9 trillion VND and private placements making up the remaining 92.78 trillion VND.

During this period, bank bonds constituted 67.1% of the total issuances, overshadowing the real estate sector, which accounted for only 20.8%. The real estate sector has seen a decline, issuing only 25.1 trillion VND in bonds, primarily from Vingroup, which is down by 13.6% year-on-year.

Despite the overall drop in new bond issuances from real estate companies, many have been actively repurchasing bonds ahead of maturity.

Since the beginning of the year, the total value of early bond repurchases has reached 55.2 trillion VND, marking a 10.6% increase compared to 2024. The real estate sector leads this trend, accounting for approximately 50.7% of the total repurchased value.

A total of 151.87 trillion VND in bonds is set to mature by the end of 2025, with 53.8% of this amount belonging to the real estate sector.

The Government is currently working on a draft amendment to the Corporate Law, which includes new conditions for issuing private bonds that aim to limit the debt-to-equity ratio to no more than five times the issuer's equity.

This proposed regulation seeks to ensure that companies maintain financial stability while also facilitating funding for growth and restructuring efforts.

The Ministry of Finance believes that these measures will not adversely impact capital raising efforts, as companies can still raise capital through equity markets or bank loans./.

VNA