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Corporate bond market cools in September after policy changes
Private corporate bonds raised in September dived from the previous month after a decree took effect to tighten the issuance on the corporate bond market.
Data from the Ha Noi Stock Exchange (HNX) showed the total value of corporate bonds sold in September was VND16.25 trillion (nearly US$700 million), news site ndh.vn reported.
September’s value nosedived 80 per cent from August's record of VND83.8 trillion and was still modest compared to the March-July period.
Between March and July, local companies issued an average of VND30.3 trillion worth of bonds, ndh.vn reported.
In September, banks’ issuance accounted for 80 per cent of the total sold value, which was VND13.17 trillion.
The Viet Nam International Joint Stock Commercial Bank (VIB) topped the market as it sold VND3.5 trillion worth of bonds in September.
Orient Joint Stock Commercial Bank (OCB), the Vietnam Bank for Agriculture and Rural Development (Agribank), and Sai Gon-Ha Noi Joint Stock Commercial Bank (SHB) issued VND2 trillion each.
Among non-banking companies, SAM Holdings was the biggest bond issuer, raising total VND300 billion worth of bonds.
The bonds were due in 24 months at an 11 per cent annual interest rate. Bonds were backed by 24 million shares of Binh Duong Production and Trading Goods Corporation (UPCoM: PRT) and 20 million shares of Phu Tho Tourist Service JSC (UPCoM: DSP).
On September 1, Decree 81/2020/ND-CP took effect to restrict risky purchases of corporate bonds to make the bond market stronger and more sustainable.
Banks face tighter rules
The State Bank of Viet Nam (SBV) published a draft circular regulating financial-banking firms’ buying of corporate bonds to make sure banks control bad debts and credit risks.
Under the draft circular, a financial-banking institution can only purchase corporate bonds if its bad-debt ratio is below 3 per cent of the total assets, recorded in the previous year’s audited financial report.
The institution is forbidden from buying bonds from the issuer that logs bad debts in other banks and financial firms in the last 12 months prior to the purchase date.
In addition, the institution is not allowed to buy bonds to help the issuer restructure its debts or raise ownership in the issuer or any third-party company.
The SBV is waiting to collect feedback on the draft circular.
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