Bonds have not improved, real estate is still thirsty for credit capital...

Since April 2025, real estate bond issuance has shown signs of recovery, but mainly from only one enterprise. Most real estate enterprises are still mainly dependent on bank loans.

Real estate bonds are flourishing again in some "big guys"

According to statistics from the Vietnam Bond Market Association, in the first half of May 2025 (as of May 16), the market recorded 10 corporate bond issuances with a total value of VND 10,450 billion.

The banking sector continues to play a leading role with 6/10 issuances, however, it is worth noting the return of real estate bonds after a long period of stagnation.

Specifically, there were 3 issuances from real estate enterprises, including Vingroup Corporation and Van Phu Real Estate Joint Stock Company, with a total value of up to 4,150 billion VND - accounting for nearly 40% of the total amount of corporate bonds issued in the first half of the month. Of which, Vingroup alone issued up to 4,000 billion VND.

Previously, in the first quarter of 2025, the real estate bond market was almost completely frozen. However, in April, this capital mobilization channel began to become active again with 4 issuances, of which Vingroup accounted for 3 with a total value of 9,000 billion VND, equivalent to 80% of the issuance volume of the entire real estate industry. This reality shows that the bond market has not really recovered completely, but is still mainly focused on a number of large-scale enterprises.

In the context of limited new issuance sources, real estate enterprises are facing huge pressure to restructure debt and mature bonds. According to VIS Rating, up to 73% of the total VND13,200 billion of non-financial bonds issued in the first 4 months of the year were used to restructure debt - mostly real estate bonds.

Since the beginning of the year, businesses in this sector have bought back about VND27,416 billion of bonds before maturity. However, from now until the end of 2025, they will have to face a debt maturity of nearly VND82,000 billion.

With increasing financial pressure, the situation of late payment of principal and interest on bonds in the real estate industry continues to spread. According to Mr. Nguyen Ba Khuong - analyst at VNDirect Securities Joint Stock Company, most of the more than 90 enterprises currently in debt repayment on bonds in the market are in the real estate group.

Most real estate businesses are still mainly dependent on bank loans. Illustrative photo

Credit leads, bonds promise breakthrough

According to the latest data from the State Bank, as of the end of March 2025, outstanding credit for the real estate business sector exceeded VND 1,560 trillion, an increase of about 20% compared to the end of 2024.

This figure is 5-6 times higher than the average credit growth rate of the entire system, showing the high dependence of the real estate industry on bank loans.

The financial reports of the first quarter of 2025 of 12 listed banks show that the trend of real estate lending continues to increase sharply. For example, at Techcombank, outstanding real estate loans accounted for nearly 34% of total outstanding loans and increased by nearly 15% compared to the end of last year. At PGBank, the increase was up to 34.4%, while VIB recorded an increase of 25%, KienlongBank was 20.5%, and HDBank increased by 17%...

Although banks claim that their lending is focused on segments with “real demand” and projects with legal transparency, the reality is that money flows mainly into high-end projects. The market is almost lacking in affordable housing supply – a segment with high demand.

Mr. Nguyen Van Dinh, Vice President of the Vietnam Real Estate Association, commented: The fact that credit capital continues to focus on the high-end segment causes the supply-demand balance to become increasingly unbalanced, while increasing risks for the banking system. In this context, diversifying capital mobilization channels - especially bond issuance - is urgent to reduce pressure on the credit system.

A notable warning is that the debt/equity ratio of real estate businesses is at its highest level since 2018. S&I Ratings experts commented that financial pressure will continue to weigh on businesses in the coming time, thereby predicting that corporate bond issuance activities will explode in the remaining three quarters of the year.

VIS Rating also shares the view that the non-financial bond market in 2025 will be led by issuances by residential real estate developers. In the context of a gradually improving business environment, real estate businesses continue to benefit from access to bank credit, but still tend to increase bond issuance to diversify capital sources and optimize financial strategies.

Tightening conditions for issuing individual corporate bonds

The draft Law on Enterprises (amended) being submitted to the National Assembly for consideration has a proposed additional provision: for non-public companies, the condition for issuing individual bonds is that the total debt payable (including the value of the bonds expected to be issued) must not exceed 5 times the equity of the issuing enterprise.

According to the Ministry of Finance, this regulation basically does not hinder enterprises in raising capital for production, business or achieving economic growth targets. In particular, enterprises with high debt ratios can still access capital through the channel of issuing bonds to the public or borrowing from banks, in addition to issuing individual bonds.

Data from the Hanoi Stock Exchange shows that in 2024, only 13 enterprises (excluding commercial banks) issued corporate bonds with a debt ratio exceeding 5 times the equity at the time of issuance. This shows that the new regulation will not have too much impact on the number of enterprises or the individual corporate bond market in general.

Source: https://baodaknong.vn/trai-phieu-chua-khoi-sac-bat-dong-san-van-khat-von-tin-dung-253760.html