Property developer’s bond market warms up in March

The government last month loosened regulations by allowing companies to delay redemption by two years.In the first quarter property companies issued VND24.7 trillion worth of bonds, the majority of them in March, according to the Ministry of Finance.

Some 99.99% of the bonds were bought by organizations, mostly banks.

Data from the Hanoi Stock Exchange shows that four property developers issued bonds last month with coupon rates of 6-13% a year.

Hung Yen Urban Investment and Development raised VND7.2 trillion from bonds with a 12-month term.
Furniture company Luxury Living raised VND4.8 trillion from five-year bonds with a rate of 9%.

Nam An Investment and Trading issued VND4.7 trillion worth of bonds for 18 months at 13%.

Southern Star Urban Development and Trading Investment, formerly a subsidiary of conglomerate Vingroup, raised VND4.69 trillion through 18-month bonds carrying 13% interest.

But the challenges that corporates have in redeeming their previous issuances remain.

The ministry said that in the first quarter 69 companies delayed redemption of VND19.2 trillion worth of issuances.

Bonds adding up to VND113 trillion are set to mature during the rest of this year, and some companies might default, credit rating company VIS Rating warned.

They would have difficulty raising funds to redeem the bonds amid the property market slump, it added.