Friday , June 21 2024

Over $1.7B worth of bonds extended

Over VND42 trillion ($1.77 billion) worth of bonds were extended in the second quarter, allowing over 30 issuers more time to redeem them amid economic challenges.

The minimum extension was one month, and the maximum two years, according stock brokerage VNDirect.

Their coupon rates were increased by 0.5-3 percentage points from the original rates.

Issuer Phu Long Real Estate was able to extend VND14 trillion worth of bonds by another 12 months.

Sovico, a shareholder of Vietjet, has extended VND9.6 trillion worth bonds. Some of them had a new maturity date by May 2025 instead of May this year.

Novaland was able to extend VND2.75 trillion worth of bonds, while Hung Thinh Land managed to prolong its payment by up to seven months for VND1.2 trillion worth of bonds.

Bond extensions, however, are only a short-term solution as issuers still have to pay back investors in the future.

“There is a large payment pressure in the last two quarters and negotiating an extension is the best solution an issuer can make at this time,” VNDirect analysts said in their report.

The issuers were able to extend the bonds by up to two years after the government issued a decree to permit such action in March this year, but only if the investors agree.

The decree is considered an intervention to save the bond market which has been facing difficulties since last year after several high-profile business leaders were arrested for on charged pertaining to bond issuance violations.

In the second quarter 29 bonds were issued with a total value of VND19.28 trillion, down 83% year-on-year.

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