FiinRatings Insight #2 - Vietnam Corporate Bond Market: Balancing Return and Risk
Bond has become an important and growing funding source for Vietnamese corporates besides bank credit and equity market. With the efforts to support professional and non-professional investors for their evaluation, selection, and investment in the secondary market, FiinRatings is pleased to present FiinRatings Insight #2 - Vietnam Corporate Bond Market: Balancing Return and Risk.
Our report covers in-depth and comprehensive insights of Vietnam Corporate Bond Market in 9M2021 as following:
- Issuance activities and market size: The issuance value in primary market in 9 months of 2021 reached VND 430 trillion (+ 27% YoY) while the average growth rate in previous years was 30-40% annually. Real estate sectors’ issuance value reached VND 172 trillion, meanwhile commercial banks utilized capital mobilization through the bond channel with a value of VND 116 trillion (accounting for 33% of the total issuance value).
- Coupon rate and Tenor: The average issuance term of 9M2021 declined from 4.3 years in the same period last year to 3.7 years, mainly in the capital-intensive sector with long payback periods such as Energy and Real Estate. The average nominal issue rate for all maturities and sectors also fell by 2.1 percentage points to 7.8% from 9.9%.
- Issuers’ Credit quality: Despite the recent impacts of the COVID-19 pandemic, bond issuers, which are mostly listed companies, have basically maintained their credit quality at a stable level. However, there are still 28 out of 52 listed companies that we have preliminarily rated as weak and very weak in meeting their financial obligations.
- Indication for Vietnam from Evergrande: The financial health of Vietnam's real estate enterprises generally is relatively better than Evergrande's before the group encountered financial distress. However, sudden policy changes on credit lines into real estate in China have affected regional financial markets and even China's economic growth prospects.
You can refer to the report for details HERE.
Read and download our FiinRatings Insight #1: Vietnam Corporate Bond Outlook 2021
FiinRatings, a brand, and part of FiinGroup, is licensed by the Ministry of Finance to operate as a Credit Rating Agency (“CRA”) for Vietnam on 20 March 2020. With a continuous effort to improve expertise and credit rating methodologies, on 24 May 2021, FiinRatings received Technical Assistance from S&P Global Ratings and ADB.
It is our pleasure to receive feedback from our valued customers on this first-issued publication to better inform market participants in the next Rating Insights.
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