Corporate bond issuance up 222 percent in Q1
More than 9.1 trillion VND (391 million USD) worth of corporate bonds were issued in the first quarter of 2019, up 222 percent year on year.
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The Refrigeration Electrical Engineering Corporation (HoSE: REE) had the highest value of corporate bond issuance with 2.32 trillion VND (100.32 million USD).
REE’s bonds will mature in 10 years with annual yield rate of 7 percent.
HCM City Infrastructure Investment JSC (HoSE: CII) issued 10-year bonds worth 1.15 trillion VND (49.72 million USD) at an annual yield rate of 7.2 percent.
According to the research division of SSI Securities Inc (SSI), the value of corporate bond issuance this year has increased because firms need new channels to raise capital instead of looking for bank funding.
The State Bank of Việt Nam (SBV) has recently granted a maximum 15 percent credit growth rate a year for some commercial banks that have met Basel II standards.
Other banks that do not meet Basel II standards will have maximum credit growth rate of 10-13 percent a year.
Meanwhile, the SBV has already asked commercial banks to lower the rate of short-term capital used for medium- and long-term lending from 45 percent to 40 percent, starting in 2019.
Vietnam’s corporate bond market is expected to improve in the future as more international investors are eyeing local businesses for their higher quality and performance.
