MINISTRY OF EDUCATION AND TRAINING STATE BANK OF VIETNAM

HO CHI MINH UNIVERSITY OF BANKING

FINANCIAL FACILITIES

ESSAY: THEORY OF FINANCE AND MONEY

GROUP 5: SITUATION OF BOND ISSUANCE OF VIETNAM

ENTERPRISES

First and last name Student code

Do Thi Kim Ngan 120603210214
Nguyen Ho Yen Ngoc 120603210227
Tran Thi Phuong Thao 120603210158
Nguyen Thi Phuong Uyen 120603210189

Section Class: K3D2

Instructors: PGS.TS Dang Van Dan
Training system: International Training Institute

CHẤM ĐIỂM
Bằng số Bằng chữ

TP. HỒ CHÍ MINH – NĂM 2022

1
TABLE OF CONTENTS

2
 1. Actual situation of bond issuance of Vietnamese enterprises
1.1. The situation of issuing bonds of domestic enterprises (domestic bonds)
As we all know, the bond market began to form in 2000, but it was not until 2011 that the
bond market began to develop in Vietnam. Especially from 2017 until now, the market
has developed rapidly, becoming a channel to mobilize capital for businesses, serving
production and business, and reducing dependence on bank credit channels.
The corporate bond market has two forms of issuance: private bonds and public bonds. In
which, focusing on the form of individual bond issuance, accounting for more than 92%
of the total issuance.
From 2019 to the end of the first quarter of 2022, there were 960 businesses issuing
corporate bonds individually with 4,312 issuances with a total value of more than 1.4
million billion VND, an average of 304,000 billion VND/year; about 9 times higher in
the period 2011-2015; average growth rate of about 48%/year. In 2021, the bond market
reached a record level with a total issuance volume of VND 639,766 billion, an increase
of 38.8% compared to 2020 (mainly individual bonds accounted for nearly 95% of total
issuance, increasing 38.8% compared to 2020; bonds offered to the public increased by
11.8% compared to 2020); unsecured individual bonds accounted for 50.3%, unsecured
public bonds accounted for 99% of the total issuance volume. The size of the bond
market by the end of 2021 is equivalent to 18.2% of GDP, an increase of 42.4%
compared to the end of 2020, the individual bond market alone is 16.84% of GDP, an
increase of 40.5% compared to the end of 2020.
In the first quarter of 2022, the volume of individual bonds issued reached VND 104,752
billion, 3 times higher than the same period in 2021. In the field of issuance, the focus
was mainly on real estate with 338 enterprises issuing more than 470,000 billion. VND
(accounting for 33%); In finance and credit, there are 71 enterprises issuing more than
VND 444,000 billion (accounting for 31%); trade and service have 87 enterprises issuing
more than 125,000 billion dong; securities with 68 companies issued more than 36,000
billion; In construction, there are 79 enterprises issuing more than 64,000 billion VND…
From 2021 to 2022, credit institutions remain the largest issuer, accounting for 40.2% of
total bond issuance. Banks participate in the market with the role of both issuers and
investors of corporate bonds (mainly construction and real estate businesses, in which
buying corporate bonds from real estate businesses accounts for about 50% of the total
circulation). Credit institutions provide credit to customers through investment in
corporate bonds at a high rate, accounting for about 90% of the total corporate bond
investment balance of the whole system. As of December 2021, the total investment
balance of corporate bonds of the whole system of credit institutions is VND 220,000
billion, an increase of VND 46,400 billion (up 26.7%) compared to the end of 2019,
much higher than the increase. credit growth of the whole system is 3.54%.
Among 300 companies issuing bonds individually in the first months of 2021, 207
companies issued bonds; although there are collateral assets, but mainly projects, assets
3
formed in the future or shares of the bond-issuing enterprise; Many businesses issue
bonds with a large volume while their equity is small, business results have suffered
losses over the years, but still issue a volume of corporate bonds up to trillions of dong
for the purpose of raising capital. for use by the "parent" company; issuing corporate
bonds but using them for wrong purposes; there has not been a reputable organization to
rate the business, the collateral has not been independently appraised, leading to
investment risks and risks of legal disputes; High bond interest rates make many
businesses face the risk of default and insolvency, especially for real estate businesses
(among more than 100 real estate businesses that issued corporate bonds individually in
the past year). In 2021, there are 26 enterprises recording losses in the first 6 months of
2021. As of June 30, 2021, the average debt-equity ratio of listed real estate companies is
2.5 times. , while this ratio of unlisted real estate enterprises is 8.1 times)…
According to statistics, we can easily see that the demand for capital from businesses is
very large, so the bond market develops quickly and shows no signs of stopping. Such
development is also understandable because although Vietnam's corporate bond market
has achieved a rapid growth rate of 45% per year for nearly 5 years, the size of the whole
market in general, only 20% of GDP, far lower than other countries in the region...
Recent movements in the corporate bond market show that we need to properly identify
the nature and operating rules of the market. the market to behave appropriately, thereby,
promoting the market to develop quickly and sustainably, what we aim for is sustainable
development, the development of the bond market needs to create and bring stability to
the market. determine the future of the bond market, not just meet and fix the temporary
capital demand as in the present.
The size of Vietnam's bond market, including corporate bonds, is only 20% of GDP. This
ratio is very small compared to most developed countries in Asean or compared to Korea
and China, with the size of the local currency bond market mostly reaching from 50% of
GDP (like the Philippines) to nearly 150% of GDP (like the Korea).
From the experience of previous countries, the development of the domestic bond market
is an indispensable need and requirement for Vietnam to perfect the financial market
structure to ensure the creation of all three important capital channels, including: equity
(stocks), long-term debt capital (bonds) and bank credit capital (usually short-term
working capital) in order to help the financial market best promote its capital conduction
function to promote promote economic development effectively. Given the speed and
requirements of businesses as well as the needs of economic development, it is forecast
that the bond market will continue to increase in the future.
According to the issued statistics, in 2022, the value of the bonds to mature is VND
214,367 billion; And the forecast for 2023 and 2024 has the largest bond maturity at
VND 338,897 billion and VND 297,669 billion, respectively.
The current state of massive domestic bond issuance has hidden potentials and generated
a lot of mistakes by businesses behind it, now many businesses take advantage and
4
collude with consulting units. , issuing bonds, auditing units, fraudulently issuing bonds,
circumventing the provisions of the law to raise capital illegally, using improperly issued
issuance purposes, using them to handle financial problems. Urgent key and ensure
liquidity for the company such as: reversing bank debts, paying due debts, paying
commissions to serve capital mobilization, investing in other business activities... hidden
many mistakes in the issuance of bonds, creating many risks for investors and security,
financial and monetary as soon as investors spend money to buy these individual bonds,
because the nature of the business has a sign of sign of illiquidity right from the time of
bond issuance.
For example, in the case of Tan Hoang Minh business owner being arrested for fraud
related to corporate bonds, Tan Hoang Minh bond investors have not been refunded after
more than 4 months.
In addition, the main structure of investors in the market is still concentrated in securities
companies and credit institutions, the number of professional investors accounts for only
6%, potentially creating risks: Banks buy Bonds are intended to reverse debt for the
issuing businesses that have outstanding credit balances at banks, giving rise to
increasingly serious bad debts, or by investing in bonds to "pump" money for companies.
bank's backyard company, self-interest, cross-ownership; Bond issuers take advantage of
individual investors' ignorance of information to appropriate assets of bondholders...
1.2. Actual situation of bond issuance of Vietnamese enterprises in the
international market (International bonds)
While raising capital through domestic bond channels is being promoted by domestic
enterprises, the issuance of international bonds has not been commensurate with the
needs and potentials of Vietnamese enterprises.
According to the Hanoi Stock Exchange (2022), the scale of international bond issuance
by enterprises in 2021 is only 1.24 billion USD, equivalent to about 0.45% of GDP. This
is quite a modest figure compared to the domestic bond market.
In fact, the benefits from international bond issuance for businesses are undeniable.
Issuing international bonds not only helps businesses increase their medium and long-
term capital sources, reduce dependence on domestic interest rates, but also improve the
reputation and brand of enterprises in foreign markets, creating a stepping stone for
business development. better penetration of foreign markets.
Through more than 35 years of opening up and international economic integration,
Vietnam has gradually approached international capital through the issuance of bonds.
international capital through the issuance of bonds abroad.
According to BIS (2022), by the fourth quarter of 2021, the total value of Vietnam's
outstanding bonds has exceeded $4.4 billion. On average, in the last 10 years, the total
value of outstanding bonds has reached more than 3.2 billion USD, the average annual

5
growth rate is about 5%. This shows that Vietnam has tried to find and expand capital
from abroad to supplement the limited domestic capital.
The structure of Vietnam's international bond issuers has also changed markedly in recent
decades. In the period 2012-2017, most of Vietnam's international bonds were issued by
the government with the proportion of more than 70% over the years. Even in 2017,
almost 100% of Vietnam's outstanding international bonds were government bonds.
However, this trend has reversed from 2018 onwards. The government's share of
international capital mobilization has gradually decreased over the years, from 75% in
2018 to only 28% in 2021. Meanwhile, financial and non-financial institutions have
gradually become the main issuer. weakness of Vietnam in the international bond market.
Even more impressive is the growing opportunities that have been opened up for
Vietnamese non-financial institutions as the proportion of these issuers is increasing in
the structure of Vietnamese international bond issuers. South, from a modest 13%,
equivalent to 513 million USD in 2019 has increased to 31%, equivalent to 1,355 million
USD in 2021.
Meanwhile, the value of outstanding bonds of financial institutions also increased
significantly, from USD 234 million in 2017 to USD 1,813 million in 2021 and
accounted for 41% of the total value of outstanding international bonds of Vietnam.
One of the undeniable reasons for the impressive growth of Vietnamese enterprises in
raising international capital in recent years is the more open policy and the increasingly
improved legal mechanism. of Vietnam for the issuance of international corporate bonds.
On December 26, 2013, the Government issued Decree No. 219/2013/ND-CP on
management of foreign loans and repayment of enterprises not guaranteed by the
Government. This is an important legal basis, defining responsibilities and coordination
among state agencies such as the State Bank, the Ministry of Finance, the Ministry of
Planning and Investment, as well as the rights and responsibilities of enterprises. foreign
borrowing business.
Also aiming at simplifying administrative procedures, unifying the process of conducting
international bond offerings of enterprises and managing foreign exchange for
international bond issuance of enterprises, in February/February. In 2022, the State Bank
of Vietnam has conducted public comments on the draft Circular to replace Circular No.
17/2013/TT-NHNN.
This draft, if approved, will be an important step forward, creating more favorable
conditions for domestic enterprises to mobilize capital in the international bond market.
A major change of this draft is the cancellation of all regulations on procedures for
appraising international bond issuance plans by state-owned commercial banks.
Besides the positive changes in the domestic regulatory environment, the stability of the
exchange rate is also a favorable factor in borrowing abroad. When issuing international

6
bonds, debt repayment pressure will increase for issuers if the local currency depreciates
in the foreign exchange market.
However, from 2018 to now, the exchange rate has remained quite stable in the range of
22,800 - 23,500 VND/USD. Especially from the first quarter of 2020 until now, the
VND/USD exchange rate has tended to decrease. This helps reduce the pressure of
enterprises to pay debts in foreign currencies and contributes to a relative reduction in the
cost of international capital mobilization of enterprises.
In addition, impressive economic growth, stable domestic prices and political stability are
important foundations for Vietnamese businesses to receive great attention from foreign
investors. In the period 2011 - 2019, Vietnam's economic growth has always maintained
at 5.2%/year or more, higher than that of 4 neighboring countries in the ASEAN region.
Especially in 2020, when the world and regional economies were negatively impacted by
the COVID-19 pandemic, Vietnam still achieved a growth rate of 2.9% while most other
countries in the world suffer from negative growth.
It can be seen that, in addition to the capacity and reputation of enterprises themselves,
success in finding international capital to finance domestic operations of enterprises
depends mainly on two issues:
- Firstly, objective conditions from the international bond market such as the legal system
in foreign bond markets, the interest of international investors in emerging markets like
Vietnam, the attractiveness of international bond interest rates compared to domestic
bond issuance rates…
- Second, domestic conditions such as the government's macroeconomic policy and
foreign debt management policy from time to time, the provisions of the Securities Law
and regulations on foreign exchange management for foreign exchange transactions.
issue international corporate bonds…
Considering the domestic conditions alone, the reality of the past time has shown that the
reform of administrative procedures along with the increasingly open and transparent
legal corridor has had a clear positive impact on the operation of the country.
international bond issuance activities of Vietnamese enterprises.
In fact, businesses (including financial institutions and non-financial institutions) are
increasingly accounting for a larger proportion of the total value of Vietnam's outstanding
international bonds, from 25% to 25%. , equivalent to 764 million USD in 2018 to 72%,
equivalent to 3,168 million USD in 2021. This is a trend and also a great opportunity for
businesses on the way to find funding for business activities, investment, contributing to
economic growth.
Although opportunities are increasingly open for businesses to raise capital by issuing
international bonds, in reality, accessing this market is not easy for any business.

7
According to the Corporate Bond Information page of the Hanoi Stock Exchange, in
2021, there were only 5 successful international bond issuances by 5 issuers with a total
issuance value of 1,240 million USD.
In which, 87% of the issuance value belongs to 4 big-name real estate companies,
including Phu My Hung Development Company Limited, VINPEARL Joint Stock
Company, and Local Investment Group Joint Stock Company. NOVA and BIM Real
Estate Joint Stock Company, the remaining 13.3% belongs to Ho Chi Minh City
Development Commercial Joint Stock Bank (HDBank). There is a complete absence of
the participation of other manufacturing, trading and service enterprises - which is also an
important driving force for economic development.
Access to international markets depends on the credit risk perceived by investors and is
often measured by a country's credit rating.
An international rating of B- is generally considered the minimum level for an
international bond issue. In addition to weighing the trade-offs between a bond's return
and its credit risk, international investors also monitor market indexes and if a bond
qualifies for inclusion in a index, the need to invest in that bond will automatically arise.
The possibility of Vietnam being upgraded to include in emerging market indexes of
international index organizations such as FTSE, MSCI has been mentioned since 2018
but so far there have been no concrete results. This is a major barrier in accessing the
international bond market of Vietnamese enterprises.
2. Review/Comment on Vietnam corporate bond market

REFERENCES
Đánh giá thực trạng huy động vốn trên thị trường trái phiếu quốc tế của doanh nghiệp
Việt Nam. (2022, 11 15). Được truy lục từ tapchitaichinh.vn:
https://tapchitaichinh.vn/danh-gia-thuc-trang-huy-dong-von-tren-thi-truong-trai-phieu-
quoc-te-cua-doanh-nghiep-viet-nam.html
Đằng sau việc doanh nghiệp ồ ạt phát hành trái phiếu. (2021, 8 16). Được truy lục từ
thanhnien.vn: https://thanhnien.vn/dang-sau-viec-doanh-nghiep-o-at-phat-hanh-trai-
phieu-post1101523.html
Quỳnh, Đ. N. (2022, 11 13). Vấn đề cốt lõi trên thị trường trái phiếu doanh nghiệp. Được
truy lục từ vneconomy.vn: https://vneconomy.vn/van-de-cot-loi-tren-thi-truong-trai-
phieu-doanh-nghiep.htm
Trái phiếu doanh nghiệp có nhiều điểm sáng, nhà đầu tư thiệt lớn nếu nhắm mắt bán
tháo. (2022, 11 25). Được truy lục từ thuenhanuoc.vn:
https://thuenhanuoc.vn/tapchi/chuyen-muc/kinh-te-xa-hoi/f6cf284d-2ea4-43dc-820c-
8ac233ed608a

8
Trái phiếu doanh nghiệp ở Việt Nam hiện nay: Những bất cập trong hệ thống pháp luật,
công tác quản lý và một số kiến nghị. (2022, 11 24). Được truy lục từ phaply.net.vn:
https://phaply.net.vn/trai-phieu-doanh-nghiep-o-viet-nam-hien-nay-nhung-bat-cap-trong-
he-thong-phap-luat-cong-tac-quan-ly-va-mot-so-kien-nghi-a255836.html
Vì sao ngân hàng 'thừa tiền' nhưng vẫn ồ ạt phát hành trái phiếu? (2020, 7 2). Được truy
lục từ tapchitaichinh.vn: https://tapchitaichinh.vn/vi-sao-ngan-hang-thua-tien-nhung-van-
o-at-phat-hanh-trai-phieu.html
Sở Giao dịch Chứng khoán Hà Nội. (2022). Thông tin phát hành - CBIS Portal.
https://cbonds.hnx.vn/to-chuc-phat-hanh/thong-tin-phat-hanh

9
10
11
12