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Bond maturity pressure peaks in Q4
Analysts predict peak bond maturity pressure in the fourth quarter of this year, with the real estate sector facing the most significant burden at over 43 per cent by October 4. Companies will need to issue more bonds to raise capital during this quarter.
Private corporate bonds maturing in Q4 represent approximately 42 per cent of the total from 2024. — Photo bnews.vn
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As of October 4, data compiled by the Vietnam Bond Market Association (VBMA) from the Hà Nội Stock Exchange (HNX) and the State Securities Commission of Việt Nam (SSC) show that corporate bond issuances have totalled nearly VNĐ312.1 trillion (US$12.5 billion) in 2024.
This consists of 15 public offerings worth over VNĐ27 trillion (8.7 per cent of total issuances) and 294 private placements worth VNĐ285 trillion (91.3 per cent).
Pre-maturity bond repurchases have reached VNĐ144 trillion, down 21.1 per cent year-on-year. The banking sector leads in repurchasing, accounting for about 72.5 per cent of the total repurchased value, of approximately VNĐ104.4 trillion.
For the remaining part of 2024, nearly VNĐ78.9 trillion worth of bonds is set to mature, with approximately 43.5 per cent of these bonds falling under the real estate sector, totalling over VNĐ34.3 trillion. The banking sector follows closely with nearly VNĐ8.5 trillion (10.8 per cent).
Private placements of bonds have reached VNĐ750 trillion as of October 4.
An analyst from VNDirect Securities Corporation said that the pressure of corporate bond maturities in October remains substantial, with active negotiations underway to adjust bond terms.
In detail, over VNĐ22.3 trillion in private placements of corporate bonds will mature in October, indicating persistent pressure throughout the month and into the last two months of the year.
Nguyễn Bá Khương, head of the Investment Advisory Centre at VNDirect, said that the fourth quarter marks the peak in bond maturities for the year.
Private corporate bonds maturing in Q4 account for approximately 42 per cent of the total maturing value for 2024.
The pressure from corporate bond maturities in 2025 is also significant, with nearly VNĐ180 trillion in corporate bonds set to mature, accounting for less than five per cent of the total value in 2024 and focusing primarily on Q3 and Q4, Khương added.
According to Khương, the pressure from corporate bond maturities is rising in Q4/2024, easing briefly in Q1 and Q2/2025 before increasing again in Q3 and Q4/2025. Over 40 per cent of the total maturing value belongs to the real estate sector.
Negotiations for bond term adjustments were active last month. Over 100 issuers have extended bond payment deadlines by over VNĐ155 trillion by September 27, 2024.
A senior analyst at Phú Hưng Securities Corporation, Bùi Thị Quỳnh Nga, said the optimism despite lower Q3 issuances compared to the past three years, was due to a recovering bond market and weak real estate sector.
The persistent pressure will lead many companies to issue bonds in Q4, while bond repurchasing activities are expected to remain strong. The interest rate base is likely to stay high, especially for real estate.
The real estate sector poses a risk if it fails to recover as expected, Nga said.
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