SSI: Corporate bonds continue to be an attractive capital channel

According to Ms. Nguyen Thi Thanh Tu, senior analyst, SSI Securities, in 2022, corporate bonds continues to be a potential channel for capital. Besides, bond issuance interest rates may increase.

SSI’s analysis team predicts that this year’s deposit interest rate may increase slightly by 20-25 percentage points, so the difference in interest rates on corporate bonds compared to deposits will still remain at an attractive level. . Therefore, the demand for investment in this capital channel is still high.

On the other hand, the size of corporate bonds maturing in 2022 is estimated at VND266,000 billion, accounting for about 19% of outstanding bonds. Therefore, the need to issue to ensure capital turnover of enterprises is large, and at the same time, production and business activities are expected to be more active than in 2021, making the supply of corporate bonds expected to be very abundant. .

“It is possible that corporate bond yields may have bottomed in 2021 and inched up in 2022,” forecasted Ms. Tu, “currently, the deposit interest rate has increased, so corporate bond yields will also increase. According to the fact that the majority of corporate bonds are issued with floating interest rates, besides, the trend of increasing operating interest rates of major central banks and inflation pressure in the world may affect investor sentiment. investment, raising interest rate expectations with new bond issuances”.

However, Ms. Tu noted, legal changes will have major impacts on the market. Specifically, the draft amends Decree 153/2020/ND-CP for private placement of bonds, in addition to more detailed regulations (on information disclosure responsibility, centralized depository activities, conditions) registration/change/cancellation of transactions on the Stock Exchange… ) also introduces some important amendments and supplements.

Accordingly, enterprises will not be allowed to issue bonds to contribute capital in any form, buy shares, buy bonds of other enterprises, or lend capital to other enterprises.

In addition, in case it is discovered that the issuer is using the proceeds from the bond issuance for improper purposes in the bond issuance plan or commitment, the investor has the right to request the bond issuer to buy back the bond. bonds before maturity.

The draft also provides regulations on credit rating requirements for bond issuers and bond issuers in the case of bond issuance to individual professional securities investors, bond issuance. unsecured bonds, no payment guarantee, the issuer has business results of the consecutive year preceding the year of issue or has accumulated losses up to the year of issuance.

According to Ms. Tu, the above regulations, if effective, will significantly reduce the opportunity to raise capital for bonds of enterprises. In addition, tightening regulations on issuance purposes with bond capital flows (usually 3-5 years in length) may also cause businesses to rethink this funding channel.

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