The total value of individual corporate bonds estimated to mature in 2024 is about 207 trillion VND. Analysts say that pressure on cash flow and the issue of maturing corporate bonds will still be a big challenge for real estate businesses in 2024.
2023 is the year with the largest number of corporate bonds maturing ever with the total value of individual corporate bonds maturing at more than 213 trillion VND, nearly 2 times higher than the total maturity value. in 2022 (our data excludes the amount of corporate bonds redeemed before maturity and the amount of corporate bonds whose maturity is extended).
In the context that production and business activities of many businesses are still difficult, the real estate market is quiet, many businesses have encountered cash flow difficulties and limited access to capital.
Since the fourth quarter of 2022, the list of issuers late in paying corporate bond debt obligations has continuously increased. According to data compiled by VnDirect Securities, by the end of 2023, there are more than 70 businesses on the list of late payment obligations of interest or principal on corporate bonds. This company estimates that the total outstanding corporate bond debt of these businesses is about more than 172 trillion VND, accounting for about 16.5% of the outstanding corporate bond debt of the entire market. Notably, the majority of these issuers are real estate businesses.
Source: HNX, VNDIRECT RESEARCH
On September 16, 2022, the Government issued Decree 65/2022/ND-CP (ND65), Decree 65 has stricter provisions on conditions for private corporate bond issuance, including: house regulations Investors who buy bonds must be professional securities investors, and must have a credit rating for the issuing organization. Since Decree 65 was issued until before the issuance of Decree 08, individual corporate bond issuance activities have almost been frozen (there have been only more than 30 individual corporate bond issuances with a total of The value reached more than 12 trillion VND during this period, a decrease of more than 90% compared to the previous average issuance value). Decree 08 was issued with provisions to temporarily suspend the implementation of regulations on Professional Securities Investors and mandatory credit rating regulations effective until December 31, 2023, helping development activities. Individual corporate bond issuance will recover in the second half of 2023.
However, according to the analysis department at VnDirect, the pressure on corporate bonds due in 2024 is still great.
Specifically, the total value of individual corporate bonds estimated to mature in 2024 is about VND 207 trillion, down 3% over the same period (data excludes corporate bonds bought back before maturity and other corporate bonds repurchased before maturity). Corporate bonds have their term extended as announced until January 10, 2024).
The largest one is the real estate group, accounting for 59.3% of the total maturity value (approximately nearly 123 trillion VND), followed by the Finance – Banking group, accounting for 29.2% of the total maturity value. Compared to the maturity value in 2023, the maturity value of the real estate group increases by 23.7%, and that of the Finance – Banking group increases by 69%.
“In the context that the real estate market is still quiet, the legal clearance for projects is still slow compared to expectations, difficulties for real estate businesses will continue.” next year. Therefore, we believe that pressure on cash flow and the issue of maturing corporate bonds will still be a big challenge for real estate businesses in 2024,” the analysis team assessed. .
Pressure on cash flow and the issue of maturing corporate bonds will still be a big challenge for real estate businesses in 2024.
Private corporate bond issuance activities may be quiet again next year if there is no support policy to replace Decree 08, which expires on December 31, 2023. Private corporate bond issuance activities may quiet down again, when the provisions in Decree 65 include: regulations on professional securities investors, regulations on mandatory credit ratings officially take effect (these regulations have been discontinued). implemented until December 31, 2023).
“We believe that the application of these regulations is necessary to aim at improving quality to stabilize and develop a sustainable corporate bond market in the long term. However, we believe that the Government The government should research and issue a number of other support policies to replace Decree 08, which expires from January 1, 2024, to effectively support and promote the recovery process of the corporate bond market. lasting.
We expect that with the efforts of both operators and market participants (especially issuers), the corporate bond market can witness a clear and sustainable recovery. stable from the end of 2024,” analysts said.
Previously, on October 23, the Ho Chi Minh City Real Estate Association (HoREA) had proposed to the Prime Minister and the Ministry of Finance to extend the suspension of the above provisions until December 31, 2024. , instead of until December 31, 2023. However, in the opinion of the Ministry of Finance, after more than 8 months of implementing Decree 08, professional securities investors who are individuals have accumulated enough time to meet the regulations for professional securities investors in Decree 65, so there is no need to It is necessary to extend the period of suspension of enforcement of this regulation. Regarding mandatory credit rating regulations, currently, the Ministry of Finance has licensed the business of credit rating services to 3 businesses that meet the conditions and capacity as prescribed by law, including 1 The enterprise’s founding shareholder is Moody’s, the world’s most prestigious credit rating organization. The remaining two enterprises are receiving technical support from S&P and Fitch.