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After the Tan Hoang Minh case, the issue of individual corporate bonds dropped sharply

On May 19, the Ministry of Finance said that after the rectification moves of state agencies to the issuance, service provision and investment activities, corporate bonds (Corporate bonds) individually, the corporate bond market in the first months of 2022 has changed, the issuance volume has decreased, however, the responsibility for information disclosure and review of issuance conditions is provided by enterprises and organizations. fuller compliance services.

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The corporate bond market fluctuated strongly after the Tan Hoang Minh incident. Photo: Luong Bang

Specifically: Regarding the issuance volume, in the first quarter of 2022, the volume of corporate bonds issued individually reached VND 138,809 billion. The volume of corporate bond issuance was concentrated mainly in January 2022, before Circular No. 16/2021/TT-NHNN dated November 10, 2021 stipulating that credit institutions and foreign bank branches buy and sell corporate bonds effective, in February and March, the volume of individual corporate bond issuance gradually decreased.

However, in April, after there was information about the cancellation of bond issuances of 3 companies related to Tan Hoang Minhindividual corporate bond issuance volume dropped sharply and stood at about VND 30 trillion, down 33% over the same period in 2021.

Real estate and construction businesses were the two biggest issuers in the first quarter of 2022, accounting for 50.98% and 18.87% respectively; commercial banks accounted for 4.85%, commercial and service enterprises accounted for 6.8%, manufacturing enterprises accounted for 9.2%. In April 2022, mainly bonds issued by credit institutions (accounting for 63.4%) and bonds of real estate group accounted for 11.6%.

Repurchase activities of bonds before maturity continued to be carried out in large volume by enterprises. In the first 3 months of 2022, the pre-maturity redemption volume was VND 12.8 trillion. By the end of April 2022, the total volume of bonds bought back before maturity was 24.7 trillion dong, up 17.9% over the same period in 2021. Especially the volume of bonds bought back in April was 11.9 trillion dong, equivalent to the buyback volume in the whole first quarter.

In addition, a number of companies that have issued bonds actively disclosed unusual information or corrected announced information about the purpose and plan of using bond capital and sent it to the Hanoi Stock Exchange.

At the same time, after Directive No. 01/CT-BTC of the Ministry of Finance, issuers and consulting organizations have reviewed the conditions and issuance documents before launching a new offering. Accordingly, the issuance volume in the first 2 weeks of May continued to decrease, reaching 5.2 trillion dong, equivalent to only 1/3 of the issuance volume in the same period in 2021.

The Ministry of Finance said that it is reviewing and reporting to the Government to report to the National Assembly to amend a number of provisions in the Law on Securities and the Law on Enterprises, which clarify (i) the scope of public issuance, issuance individual investors, (ii) the conditions for the private placement of corporate bonds, (iii) regulations for professional securities investors to limit individual investors from buying corporate bonds without paying attention to and assessing risks. (iv) the transparency of corporate information, the rights and responsibilities of market participants, strengthening sanctions to strictly punish violations to protect and restore investor confidence and relevant content for the healthy, transparent and sustainable development of the market.

During the assessment and correction of relevant provisions in the Law on Securities and the Law on Enterprises, the Ministry of Finance said that it is urgently finalizing the Decree amending Decree No. 153 for the contents under the authority of the Government. to improve the quality of issued bonds; direct professional individual investors to higher quality bond products; put bonds into centralized trading at the Stock Exchange to increase transparency in the secondary market; improve conditions for service providers; supplement regulations on the rights and responsibilities of organizations with supervisory functions in the market.

The Ministry of Finance will review and evaluate the development of the market to propose to the competent authorities to prescribe mandatory credit ratings for corporate bonds issued to the public and issued individually according to the Roadmap. At the same time, research and propose mechanisms to encourage institutions in the financial market to prioritize investment in high-ranked corporate bonds.

Luong Bang

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Police request, ThaiHoldings of President Nguyen Duc Thuy to pay 840 billion to Tan Hoang MinhThaiHoldings of Chairman Nguyen Duc Thuy returned 840 billion VND to Tan Hoang Minh at the request of the Ministry of Public Security.
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