Bondholder of tycoon Dang Thanh Tam's company does not want to take the money yet!

KBC failed to buy back bonds

Kinh Bac Urban Development Corporation - JSC (KBC), chaired by Mr. Dang Thanh Tam, has just announced the results of the early buyback of bonds issued to the public (code KBC121020). The total value of the bond lot is 1,500 billion VND, with a term of 2 years. The issuance date is June 24, 2021, and the maturity date is June 24.

According to KBC, during the period from May 11 to 15, the company only bought back 3.43 million bonds, out of a total of 7.5 million bonds (equivalent to 750 billion VND) offered for early repurchase.

At the beginning of 2023, KBC had a total outstanding bond balance of VND 3,900 billion. In the first quarter of 2023, this enterprise paid its debt on time and bought back individual bonds worth VND 2,400 billion in advance. Thus, after buying back VND 343 billion in advance, the total value of corporate bonds that KBC has left is more than VND 1,157 billion.

Previously, in early April, KBC announced that it had arranged capital and wanted to completely buy back the bond debt.

However, KBC's desire to "clean up" its bond debt may not be possible in the context of bondholders not agreeing to resell.

This is a negative signal in the corporate bond market, contrary to the situation where many bondholders are eager to get their money back in the context that many units continue to not/delay payment of interest and principal of bonds in recent times.

Some businesses such as Phat Dat Real Estate (PDR), Novland (NVL), Thai Tuan… continue to postpone maturity dates and increase bond interest rates.

KBC has maintained good business performance, the bond market is more stable after support policies and deposit interest rates in the banking system are on a downward trend.

*The corporate bond market is less gloomy. (Photo: TP)*

On May 25, the State Bank reduced its operating interest rates for the third time in less than three months. Interest rates on bank deposits with terms of 1-6 months have dropped rapidly, down to only 5%/year, equivalent to the level during the Covid-19 pandemic.

Meanwhile, the corporate bond interest rates of some organizations are quite attractive, mostly above 10%. The stability in business operations and steady cash flow make the bonds of these companies attractive.

Besides, the bond market is still considered an important capital attraction channel of the economy and is protected to develop strongly in the coming time.

Corporate bond market less gloomy

At the online seminar with the theme "Macroeconomic stability and corporate bond market development" organized by the Government Electronic Information Portal yesterday, corporate bonds were assessed as an important capital attraction channel for national development.

Associate Professor Dr. Vu Minh Khuong, Lecturer at the Lee Kuan Yew School of Public Policy, said that looking at countries that have created miraculous development, the bond market plays a very important role, accounting for 100% of GDP, of which about 50% belongs to businesses and 50% belongs to the Government.

According to Dr. Khuong, investing in things that create value is not a waste. When a penny is invested in the right things, in the right direction, it will create a lot of profit, helping to grow very quickly, very miraculously.

Accordingly, Vietnam needs to pay special attention to the issue of building a healthy bond ecosystem.

Associate Professor, Dr. Vu Minh Khuong said that, according to world experience, bonds are issued in 3 types. One is to buy insurance. When buying insurance, people can feel secure because the insurance company has carefully checked the bond's quality. The second type is to issue bonds but with guarantees. The third type of bond is the type that has no guarantee at all, no insurance, so there must be at least 2 companies to evaluate the experience, capacity, and appraisal to help people feel secure.

Although there are initial positive signals after restructuring and debt extension policies, the corporate bond market is still gloomy and the pressure to mature corporate bonds in the last 6 months of the year is still great.

According to HSC Securities, the volume of overdue bonds could reach VND77,400 billion by the end of the year, peaking in September 2023. About 110 issuers are at risk of not being able to pay the principal and interest on bonds on time.

Hot draft on banks buying corporate bonds: Who benefits? The market is very hot about the story of the draft amending the regulations on buying and selling corporate bonds at banks while real estate businesses are still facing liquidity difficulties. So what are the amendments in the draft and who benefits?

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