Unsecured bonds are booming, offering interest rates up to 12%/year

The Vietnam Bond Market Association has just released the latest data related to the corporate bond market situation. In particular, real estate giants and many large enterprises have plans to sell unsecured bonds with high interest rates.

Many businesses accelerate raising money from bond issuance - Photo: QUANG DINH

Nearly 159,500 billion VND of bonds are about to mature

Accumulated from the beginning of the year to the end of the second week of May 2025, the total value of corporate bond issuance was recorded at more than 73,200 billion VND, with a total of 47 issuances. Of which, the majority were private issuances with 63%, the rest were issued to the public.

Also during the period, the total value of bonds bought back before maturity reached over VND40,700 billion, a slight increase of 6% compared to the previous year. Real estate was the leading industry group, accounting for nearly 45% of the total value of early buybacks, over VND18,100 billion.

In the remaining period of 2025, the total value of bonds due will be nearly 159,500 billion VND. Notably, more than 52% of the value of bonds due to mature fall into the real estate group with over 83,400 billion VND, followed by the banking group with nearly 40,170 billion VND (25%).

Since the beginning of the year, the total value of privately issued bonds has reached approximately VND418,500 billion. Currently, investors can buy and sell this product on the floor operated by the Hanoi Stock Exchange.

Many "big guys" want to sell unsecured bonds, interest rates up to 12%/year

To increase cash flow, in 2025, many large enterprises will also try to raise capital by selling bonds to the market. Many of them offer relatively high interest rates, with 3 nos (no conversion, no warrants, no collateral).

Typically, Vingroup Corporation (stock code VIC) has approved a plan to issue individual bonds in 2025 with a maximum total value of VND 10,000 billion, divided into five phases.

This is a non-convertible bond, without warrants, without collateral and with a face value of VND100 million/bond. The maximum term is two years, with a fixed interest rate of 12%/year.

Many other units also have a strategy to issue 3-zero bonds, including: Rong Viet Securities (total maximum value of 800 billion VND), VietinBank (4,000 billion VND), HDBank (10,000 billion VND), BIDV (23,000 billion VND)...

Some other businesses offer quite high interest rates of 9.5-10%, with mixed "yes - no" conditions.

Specifically, BAF Vietnam Agriculture has finalized a plan to issue private bonds this year with a maximum total value of VND500 billion.

Features: convertible bonds, no warrants, secured with assets and face value of 100 million VND/bond. Term of three years, fixed interest rate of 10%/year.

Specializing in logistics services, airport aviation, infrastructure investment and industrial park development, ASG Group issued private bonds this year to raise about 300 billion VND.

This is a non-convertible bond, without warrants, with collateral, with a face value of VND100 million/bond. The company offers a maximum term of three years and a fixed interest rate of 9.5%/year.

Thanh Thanh Cong - Bien Hoa Joint Stock Company (SBT) has a plan to raise nearly VND500 billion from bonds this year. The bonds have the following characteristics: convertible, no warrants and no collateral. The face value is VND100,000/bond, one-year term, interest rate is 9.5%/year.

Assess risk appetite before buying unsecured bonds

According to SSI Securities, bond interest is usually paid regularly and does not depend on the business performance of the issuing organization. Even if the business is at a loss, it is still obliged to pay the full interest on time to the bondholder.

In the event that the issuing organization ceases operations and liquidates assets, bondholders always have priority in receiving their capital back before shareholders owning shares.

However, unsecured bonds carry a higher element of risk, because if the issuer goes bankrupt or defaults, the investor has little chance of recovering their capital.

In the market, in recent times, besides businesses that are slow to pay their bonds, there are still those that fulfill their commitments and are reputable. In addition to factors such as large companies, sustainable business results, attractive interest rates, etc., investors also need to assess their risk appetite when buying bonds.

PLUM BLOSSOM

Source: https://tuoitre.vn/no-ro-trai-phieu-khong-tai-san-dam-bao-moi-chao-lai-toi-12-nam-20250514230005725.htm