Property firms’ bonds offer double the coupon rate of bank bonds

The average bond interest rate offered by lenders was 5.4% per year, according to securities brokerage MBS’s July bond market report.

The property sector has issued VND32.6 trillion (US$1.29 billion) worth of bonds in 2024, more than any other except banking. The average term for the bonds is 2.7 years.

The most notable issuers included property developers Vinhomes (VND12.5 trillion), Vingroup (VND10 trillion) and Hai Dang Real Estate Investment and Development (VND2.5 trillion).

Banks have issued around VND96.2 trillion worth of bonds, up 140% from the same period last year, with the average term being four years.

Techcombank (VND17 trillion), ACB (VND12.7 trillion), and MB (VND8.9 trillion) have been the lenders with the biggest issuances.

Banks are issuing bonds to help mobilize medium- and long-term funds for lending later this year, MBS said.

They have also been hiking deposit interest rates, with many now offering over 6% for certain terms.

According to data from the Vietnam Bond Market Association, VND160 trillion worth of bonds have been issued this year, but only VND11.8 trillion have been meant for the public and the rest being privately placed.

But bond redemptions remain a sticky proposition for businesses, with 116 enterprises delaying them as of July, MBS said.

Currently some VND209.8 trillion worth of bonds are overdue, with the real estate sector accounting for 68%.

MBS estimated another VND95,300 billion would mature in the second half of the year, 65% issued by the property sector and 15% by banks.