Decree 08: Much work remains to be done!

Despite positive assessment of the impact of Decree 08 on the issuer and the bond market, however, for this decree to be effective, analysts say that there is still a lot of work to be done.

On March 5, the Government issued Decree 08/2023 amending and supplementing Decree 65 on private placement of bonds, which allows bond issuers to extend the term up to 2 years and payment of principal and interest with assets other than cash.

Most financial experts and securities companies agree that Decree 08 will have a positive impact on market sentiment, reducing debt maturity pressure for issuers in 2023-2024. , especially real estate businesses. However, this is only considered a temporary solution, prolonging time for businesses to have time to restructure. The fate of businesses will depend greatly on the goodwill of bondholders and issuers.

Temporary solution

Commenting on the impact of Decree 08 on the number of bonds maturing in 2023 and new issuance activities, Mr. Nguyen Quang Thuan, Chairman and CEO of FiinGroup, said that of more than 300 trillion of corporate bonds maturing in maturity. In 2023, mainly real estate bonds. In fact, in 62 lots of bonds with late payment of interest and principal, 70% are real estate bonds. However, with the current state of the real estate market, the quality of these bonds is basically low.

Accordingly, Decree 08 is expected to help implement debt restructuring. Specifically, the Decree creates specific regulations so that investors and businesses can negotiate the extension and postponement of bond debt more quickly and drastically depending on the specific situation of each investor and each project. . Especially, there is the issue of refinancing corporate bonds based on the legal status, feasibility of the apartment market and new terms including interest rates at a reasonable level for both parties.

Mr. Huynh Minh Tuan, Brokerage Director, Head Office of Mirae Asset Securities Company.

Sharing the same view with Mr. Nguyen Quang Thuan, Mr. Huynh Minh Tuan, Brokerage Director of Mirae Asset Securities Company, said that the most important point of Decree 08 is to create conditions for issuers and bondholders to have can negotiate to agree to extend the debt. This is the most positive regulation because currently real estate businesses have been stuck with liquidity.

Accordingly, Mr. Tuan said that, in general, Decree 08 creates space for bond issuers to have time to manage and structure their debt. However, the impact on the bond market is long-term because it depends on confidence in the market. In general, Decree 08 will support the group of businesses issuing bonds more than supporting the bond market.

“Decree 08 is issued as a temporary solution because most of the assets of the real estate group are located on unfinished projects, inventory and cash flow to absorb these assets are not available. Until now, credit for real estate has almost leveled off, besides, high interest rates make people afraid to borrow capital for investment,” Mr. Tuan said.

Meanwhile, Mr. Do Bao Ngoc – Deputy General Director of Kien Thiet Securities in Vietnam (CSI) assessed that Decree 08, officially issued, will positively affect the corporate bond market in the direction of creating a legal framework. to give issuers and bondholders more time and new options for negotiating principal and interest payments. However, it should be noted that this decree was issued only to stabilize urgent problems in the short term, not a solution to completely solve the problem of the corporate bond market and the problems related to corporate bonds. financial position of major issuers, including many real estate businesses.

In order for Decree 08 to really create positive changes in a clear way, Mr. Do Bao Ngoc said that corporate bond issuers must really have goodwill in negotiating with bondholders to get a plan. reasonable debt extension or asset swaps at market prices. In other words, when the interests of bondholders are guaranteed, the value of Decree 08 will really come to life.

There’s more work to be done!

In the short term, Decree 08 is expected to help relieve the psychology of businesses and investors. However, there are still many doubts about the actual impact of the decree on the corporate bond market.

Specifically, with the current interest rate difference between deposits and corporate bonds is not large, making investors lack interest in this type of bond. Especially in the context that confidence in the market is almost exhausted, “the bottle is broken, the mouse has run”, bank savings are dominating.

Despite the new Decree, the fate of corporate bonds still depends greatly on the goodwill of investors and issuers. Some experts share the common view that it is time for real estate to reduce prices in a substantive way, when homebuyers see a reasonable house price, there is no speculation, the market will have liquidity, creating favorable conditions. conditions for bondholders to have enough confidence to convert corporate bonds into assets. This can be considered as a fundamental issue, the meeting point between the issuer and the bondholder so that Resolution 08 can be effective and solve the root problem of real estate bonds.

Dr. Can Van Luc emphasized that the issuance of Decree 08 is necessary and expected by the market, investors and businesses. However, this can only be considered a temporary solution, hoping to remove most of the problems related to corporate bonds maturing this year and next. However, in order to do this, it is very necessary to have a sense of responsibility, seriously implement the commitments of enterprises, the companionship and sharing of investors, and the timely support and resolution of problems from agencies. manage. Stakeholders also need to prepare for next year when higher standard conditions (professional investor, credit rating, bond distribution time…) start to apply again.

In addition, Mr. Luc recommended, businesses should continue to be willing to sell assets at a discount of up to 30-40%; promote restructuring of products and operations, reducing costs; soon start preparing for new issuance under Decree 08 to have money to pay debts and complete unfinished projects; diversify capital sources and pay more attention to financial risk management (limiting excessive financial leverage, limiting spread investment…).

The Ministry of Finance should consider solutions to encourage the issuance of bonds to the public more, develop solutions to institutional investors, establish a secondary bond trading center (to understand the transfer, investors, etc.), promote the development of credit rating agencies, strengthen financial education to improve the quality of investors, improve institutions such as proposing amendments to the securities law and the Enterprise Law for investors. Fit….

Credit rating agencies should soon proactively develop their capacity to provide rating services. Other management agencies such as the State Bank of Vietnam, the Ministry of Planning and Investment, the Ministry of Public Security, the Ministry of Justice, etc. also need to step in and accompany, all for the general development of the capital market for the economy, businesses and investors.

Mr. Huynh Minh Tuan – Brokerage Director of the Head Office of Mirae Asset Securities Company, founder of FIDT Asset Management Consulting Company, emphasized that Decree 08 will have a positive effect on the corporate bond market, but There also needs to be synchronization and coordination from the banking system, because without credit, the market will slow down. In the coming time, it is expected that the Ministry of Finance and the State Bank will have more moves to allow the extension and rotation of debt groups for certain types of bonds.

According to N.Thoan – Khanh An/Investors