A series of businesses issue bonds with interest rates up to 14%/year

The corporate bond market update report recently released by MB Securities Company (MBS) shows that as of November 22, 2023, the total value of corporate bond issuance activities reached VND 233,000 billion, down 8% over the same period last year.

The average corporate bond interest rate in the first 11 months of 2023 reached 8.5%, higher than the average of 7.9% in 2022.

Since the beginning of the year, Banking is the industry group with the highest issuance value with about 109,600 billion VND, down 18% over the same period and accounting for 47% of the total value.

The weighted average interest rate of bank bonds is 6.8%/year, with an average term of 4.5 years. The banks issuing the largest value include: Asia Commercial Joint Stock Bank (VND 18,900 billion), Vietnam Technological and Commercial Joint Stock Bank (VND 15,500 billion), and Vietnam Joint Stock Commercial Bank for Industry and Trade (VND 12,900 billion).

Following is the Real Estate sector with a total issuance value of VND 73,100 billion, up 10% over the same period, accounting for 31%. The weighted average interest rate of real estate bonds is still 9.7%/year, the average term is 3.6 years. The real estate enterprises with the largest issuance value include: Capitaland Tower Co., Ltd. (VND 12,200 billion), Hung Yen Urban Development and Investment Co., Ltd. (VND 7,200 billion), Vinhomes Joint Stock Company (value of VND 5,000 billion).

However, it is worth noting that many businesses mobilize bonds with interest rates up to 14%/year.

For example, in April 2023, North Star Holdings Joint Stock Company successfully mobilized the NSTCH2324001 bond lot, maturing in August 2024, with a total issuance value of VND 671 billion and an issuance interest rate of 14%/year.

North Star Holdings Joint Stock Company was established in October 2006, with headquarters in Thinh Liet ward, Hoang Mai district, Hanoi city .

As of the end of June 2023, the company's equity reached 47 billion VND. The company's total assets were more than 700 billion VND, the company's liabilities were about 667 billion VND, 14.2 times higher than the equity, almost all of North Star Holdings' liabilities were outstanding bonds.

Similarly, around June 2023, Vinam Land Joint Stock Company successfully issued a bond lot with code VNLCH2329001, with a total mobilized value of 1,500 billion VND. It is known that the above bond lot will mature in June 2029, with an interest rate of 14%/year.

Vinam Land Joint Stock Company, formerly known as Chuan Tien Do Nha Joint Stock Company, was established in May 2018 in Hanoi. At the time of its establishment, the company's charter capital reached 3.6 billion VND. The founding shareholder structure included Mr. Le Minh Tan contributing 30%, Ms. Nguyen Thi Van Anh contributing 15% and Mr. Khuong Duy Anh contributing 55%.

By May 2023, one month before the bond issuance, New Housing Preparation Joint Stock Company changed its name to Vinam Land Joint Stock Company, and at the same time, increased its charter capital from VND 3.6 billion to VND 490 billion, then continued to increase its charter capital to VND 520 billion. The shareholder structure was not disclosed.

In early November 2023, Anh Quan Construction Consulting and Services Company Limited also issued VND 1,495 billion in bonds, maturing in November 2028, with an interest rate of 14%.

Anh Quan Construction Consulting and Services Company Limited was established in April 2021. Updated as of August 2023, the enterprise increased its charter capital from VND 2 billion to VND 335 billion.

Source