New issuance will be more positive

Currently, the total outstanding debt of the corporate bond market is about 1.16 million billion VND, of which the outstanding debt of individual bonds is 1.03 million billion VND, equivalent to 10% of the economy's GDP, which is still quite modest compared to other countries in the region.

In a recent report by VCBS, this securities company assessed that the corporate bond market will gradually become more positive in the coming time.  

In terms of volume, the amount of bonds bought back before maturity may continue, however, there is a tendency to decrease as the restructuring process has been strongly implemented in the 2022-2024 period; meanwhile, the amount of new issuance is gradually becoming more positive.  

In particular, stable lending interest rates are a necessary condition for the corporate bond market. VCBS forecasts that deposit interest rates will be stable and may remain stable in 2025 thanks to factors such as: Deposit interest rates at state-owned banks will remain at current levels to support the economy; Slight upward pressure may appear at private commercial banks when this group increases capital mobilization to promote credit growth, especially for banks with less flexible capital mobilization structures.  

Average lending rates are forecast to remain low and continue to show differentiation. State-owned banks will continue to reduce interest rates or announce credit support packages for certain business sectors in line with the Government and the State Bank 's direction to support the economy. Meanwhile, in the private banking group, lending rates may increase slightly in the event of increased deposit interest rates and competitive pressure on credit growth, especially for small-scale banks. In addition, businesses with weak credit histories may still have difficulty accessing credit and may even have to accept higher interest rates. Some real estate businesses may be subject to certain difficult requirements.

VCBS assessed that, in the context of low interest rates, investors tend to shift capital to investment channels that bring higher returns. This contributes to supporting the corporate bond market, in conditions of a stable bond market and attracting the confidence and interest of investors.  

However, VCBS noted that the upward trend in prices of other asset channels (including traditional and non-traditional channels) could reduce the attractiveness of the corporate bond market to investors.

Banks continue to be the "locomotive", real estate group recovers

In addition to the factor of low lending interest rates maintaining a low level, creating favorable conditions for businesses to issue bonds at lower costs and restructure capital, the issuance volume will still be led by bank bonds. With the forecast that credit growth will continue to be promoted, along with the goal of ensuring liquidity and meeting credit needs: Many banks may have to increase mobilization to balance liquidity and ensure financial safety indicators. In particular, some banks have reached the LDR threshold, leading to a priority of increasing mobilization sources to minimize liquidity risks.

Meanwhile, real estate businesses are also gradually regaining investor confidence. The real estate market is assessed to have passed the turning point and started entering a new growth cycle from 2025, actively supported by the new legal corridor that has begun to come into practice and boosted supply; homebuyers' psychology continues to improve for both residential and investment needs, starting to accept higher-risk products; many businesses have overcome the restructuring phase and restarted project implementation and launch activities.  

Real estate market transactions in 2025 are expected to be more widespread as cash flows begin to flow in for both residential and investment purposes. The creditworthiness and financial cash flow of some real estate businesses will gradually recover after the previous period of stagnation. However, VCBS also emphasized that the quality of corporate bonds will be differentiated between businesses with good legal status and those with weak credit histories and still facing difficulties in the land fund development phase.

The volume of new issuances has also gradually improved thanks to relatively high liquidity in the secondary private bond trading market, thereby contributing to improving the liquidity of issued bonds. At the same time, credit rating products have contributed to raising investors' awareness of the potential risks when investing in corporate bonds, ensuring sustainable market growth.  

On the demand side, institutional investors will still dominate the corporate bond market, especially in the form of private issuance. Small-scale individual investors will tend to prioritize choosing public bond products with issuers with credit ratings.

Currently, the pressure on bond maturity is still high. The volume of corporate bonds maturing is concentrated in the last 3 years 2025-2027.  

According to Decree 08/2023/ND-CP, for extended bonds, they can only be extended for a maximum of 2 years. Therefore, in case the enterprise cannot arrange a capital source for the amount of bonds with delayed principal and interest payments, the pressure may increase sharply again, especially from the second half of 2025.

However, VCBS also said that over the past two years, businesses have had time to gradually handle problematic bond lots. Moreover, interest rates can still be maintained at a low level, which will create favorable conditions for businesses to restructure debt or reduce pressure on capital costs.