There are businesses that issue bonds 40 times more than equity
The real estate market report for the first quarter of 2022, just published by the Ministry of Construction, said that there were a total of 48 separate issuances with a total value of about VND 30,998 billion (accounting for 78.09% of the total value of shares) and 9 installments. issued to the public with a value of VND 8,696 billion (accounting for 21.91% of total value). Since the beginning of this year, the total value of bond issuance to the public increased by 13.78% compared to the same period last year (accounting for 21.9% of the total issued value) and the value of private bond issuance decreased. 24.17%, reaching 30,998 billion VND (accounting for 78.09% of the total issuance value).
In there, Real estate is currently leading in issuance value with a total issuance volume of VND 17,211 billionaccounting for 43.36% of the total issued value.
According to the Ministry of Construction, the fact that many real estate businesses move to mobilize capital through bond issuance, large-scale issuance and high interest rates will pose risks to the market. The first, bond issuance is many times greater than equity, in some cases 40 times equity.
Second, the issuance term is short (from 3 to 5 years), especially for real estate businesses to mobilize to deploy projects (project implementation time is usually longer, over 5 years);
Third, collateral assets are real estates and projects, while the valuation of collateral may not be close to the actual price (a higher valuation than the actual value).
In the first months of the year, a number of businesses have issued large-scale bonds such as Nhat Quang Real Estate Development Joint Stock Company issued bonds to mobilize VND 2,150 billion, Smart Dragon Investment Joint Stock Company issued bonds to mobilize VND1,900 billion, Vingroup issued bonds to mobilize VND1,515 billion…
To prevent and minimize risks related to the issuance of real estate bonds, the Ministry of Construction recommends:
– Research on amending Decree 153/2020/ND-CP dated December 31, 2020 of the Government on offering and trading corporate bonds in the domestic market and offering corporate bonds to the international market .
– Monitor closely the developments of the real estate corporate bond issuance market in order to promptly control and adjust policies so that the real estate market develops in a stable and healthy manner, contributing to stability. common to the whole economy.
– Strictly monitor and control credit for the real estate sector to avoid double risks and prevent the use of loan capital for production and consumption in real estate investment and business.
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at Blogtuan.info – Source: cafebiz.vn – Read the original article here
