Banks pump out bonds as trade will soon be restricted

22:45 | 14/07/2020
Banks have stepped on the gas in bond issuance in the first half in anticipation of regulatory amendments which will impose restrictions on bond trading from early September.
banks pump out bonds as trade will soon be restricted
BIDV, HDBank, VPBank, and TPBank have been the most active bond issuers in the first half

Banks issuing the most bonds in this year’s first half are BIDV, HDBank, VPBank, and TPBank, among others. Specifically, BIDV’s bond certificates were valued at more than VND16.6 trillion ($721.74 million) and were issued in 34 rounds. HDBank also mobilised about VND10 trillion ($434.8 million) from its issuance while VPBank got VND7 trillion ($304.35 million).

The average maturity for bank-issued bonds is usually 2-3 years, however, a few banks like BIDV and VietinBank distributed bonds with longer maturity of 6-15 years to supplement their middle- and long-term capital sources.

During this time, about 130 companies distributed bonds in 818 phases worth VND156 trillion ($6.78 billion), selling nearly 70 per cent of the volume they registered to put on sale. The average maturity for the bonds is 3.93 years. Of which, the bonds with 3-year maturity numbered the most, reaching more than VND66 trillion ($2.87 billion).

In the second quarter of 2020, a total of 81 companies issued corporate bonds in 522 rounds worth VND117.7 trillion ($5.1 billion), selling more than 70 per cent of the registered volume.

Credit organisations and real estate companies lead bond issuers over the first half of this year, according to the Hanoi Stock Exchange. Accordingly, credit organisations successfully distributed more than VND43.3 trillion ($1.88 billion) with an average maturity of 4.55 years. Real estate companies issued more than VND45.5 trillion ($1.98 billion) with an average maturity of 3.84 years.

Notably, the local government has just published Decree No.81/2020/ND-CP outlining some amendments for Decree No.163/2018/ND-CP on corporate bond issuances. According to Article 6.8, corporate bonds distributed in the local market will be restricted from trading unless more than 100 investors are looking to sell at the same time (not including securities investors) in the first year after the completion of the issuance. After that, bonds will be free to be traded without limitation on the number of investors.

Decree 81 will come into force on September 1, 2020.

 

By Van Anh

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