Construction of a building near Bến Thành Market by Viva Land, a subsidiary of Vạn Thịnh Phát Group, stalled at the end of 2022 following the arrest of its chairwoman Trương Mỹ Lan. Real estate developers are struggling to meet repayment obligations due to a sluggish market. — VNS Photo Bồ Xuân Hiệp

HCM CITY — Bank bond issuance has surged to VNĐ96.2 trillion this year, a surge of 140 per cent from last year, according to MB Securities (MBS).

The bonds have an average interest rate of 5.4 per cent and a maturity of four years.

Leading issuers include Techcombank (VNĐ17 trillion), ACB (VNĐ12 trillion), and MB (VNĐ8.9 trillion).

The hike in bond issuance is expected to enhance the banks’ capacity for medium- and long-term capital, supporting credit in the second half of the year.

The real estate sector followed with VNĐ32.6 trillion in bond issuance at an average rate of 12 per cent, double the current savings rates.

Major players include Vinhomes (VNĐ12.5 trillion), Vingroup (VNĐ10 trillion), and Hải Đăng Real Estate (VNĐ2.5 trillion).

Total corporate bond issuance in Việt Nam has surpassed VNĐ160 trillion this year, with nearly VNĐ11.8 trillion issued publicly and VNĐ148.9 trillion privately, data from the Vietnam Bond Market Association (VBMA) showed.

Debt crisis

The number of corporate bond issuers, mainly real estate developers, struggling to meet repayment obligations is rising due to a sluggish market.

By the end of July, 116 companies had reported payment delays.

Novaland Group recently secured bondholder approval to restructure a $300 million convertible bond package due in 2026, which has a 5.25 per cent interest rate.

The company also extended the maturity of eight out of 17 NVL2020 bond batches, totaling nearly VNĐ3.11 trillion.

Late repayment has been a persistent issue, worsened by arrests of leaders at major developers such as Tân Hoàng Minh Group and FLC Group, which have shaken market confidence.

The arrest of Trương Mỹ Lan, 68, chairwoman of Vạn Thịnh Phát Group, in October 2022, marked a significant downturn for the financial market.

Analysts have warned the corporate bond market faces unprecedented challenges due to insufficient oversight from state agencies.

The total value of defaulted bonds is around VNĐ209.8 trillion, with the real estate sector accounting for nearly 70 per cent.

More than VNĐ95.3 trillion in bonds will mature in the second half of the year, with real estate accounting for 65 per cent of this amount.