Real estate firms issue more high-yield bonds as capital shortage bites

06/17/2019

Banks have tightened lending to the real estate sector. Photo by Shutterstock/Thoai

A capital shortage following tightening of bank credit is pushing Vietnamese real estate firms to issue more high-yield bonds.

The Phat Dat Real Estate Development JSC has announced that it will issue 1,500 bonds worth VND150 billion ($6.41 million) for the second and third quarter this year. Previously, the company had already issued bonds three times worth a total of nearly VND850 billion ($36.35 million). All four issues have interest rates ranging from 10.5 percent to 14.5 percent.
Many other real estate firms have also issued bonds in the first half of this year. The Nova Group issued VND400 billion ($17.1 million) worth of corporate bonds in two waves with an interest rate of 11 percent, while the firm Van Phu-Invest issued bonds worth VND800 billion ($34.21 million) with an interest rate of around 12 percent.
The firms are pushed to do this after banks tightened lending to the real estate sector, increasing interest rates and imposing stringent conditions for disbursement.