Real estate companies issued about $1 billion in bonds, or 62% of total market issuance, in the first quarter.

According to top brokerage SSI Securities Corporation, the total volume of corporate bonds issued in the first quarter was 37.4 trillion dong (over $1.6 billion), down nearly 24 percent from one year to the next. Sixty-two percent, or VND23.15 trillion (nearly $1 billion), was issued by property developers, down 5% year-on-year.

The proportion of bonds issued by other sectors was much lower: securities companies and non-banking financial institutions accounted for 6.8%; energy and mining companies (4.5%); commercial banks (3.3%); and infrastructure development companies (3.1%).

The average maturity of real estate bonds issued in the first quarter fell sharply to 2.9 years from 3.9 years in 2019 and 2020. Their average interest rate was 10.41% per annum, the highest rate on the market . The banking sector had the lowest average interest rate at just 4.67% per annum.

Corporate bonds accounted for 9.2% of the total at VND3.4 trillion (nearly $147 million), with their collateral being entirely equity. These included PDR bonds from Phat Dat Real Estate Development, KDC from packaged food producer Kido Group, KBC from industrial property developer Kinh Bac City Development Holding Corporation, APH from plastics producer An Phat Holdings and DXG from property developer Dat Xanh Group.

Affected by regulations on investment conditions for bonds issued by the private sector, individual investors bought only 1.53 trillion dong of corporate bonds in the primary market, only 16% of the same period last year.

The Vietnamese government recently issued a decree that limits companies to no more than two bond issues per year. The executive order follows the Department of Finance issuing warnings about the potential risks of investing in bonds and telling retail investors “not to buy bonds just because of high interest rates.”

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