Bond interest rates of real estate businesses in the first seven months of 2019 were above ten percent and mainly at 12 percent, deputy minister of Finance Vu Thi Mai said, at the regular government press conference in July 2019.
As of June 24, 2019, the debt of corporate bond market reached 10.5 percent of GDP, up 19.2 percent compared to the end of 2018.
In the first seven months of 2019, total corporate bond issuance of public companies was 31 trillion dong, equivalent to 63.8 percent of the total corporate bond value of 2018, of which the bankingfinance and real estate sector accounted for 42 percent and 22 percent respectively.
Explaining the reason why the interest rate of corporate bonds during this period was higher than in 2018, Vu Thi Mai said that this was because the interest rates on deposits and lending of commercial banks increased in 2019.
One of the cases of issuing corporate bonds at the highest interest rate of 12-14.5 percent was Phat Dat Real Estate Joint Stock Company.
Besides, according to deputy minister of Finance, the application of credit tightening policy to the real estate industry is also the reason why real estate companies have to raise capital in the market with higher interest rates than with the same period last year and compared with other industries.
The interest rate of corporate bonds of the construction industry is also popular at ten percent. For such rates compared to the banks’ rates, recently, such as Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank), Vietnam Joint Stock Commercial Bank for Industry and Trade (Vietinbank) and Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) fluctuated between 6.8-7 percent. As for other banks, the rates ranged from eight percent to 8.7 percent. Thus, bond issuance in the last seven months fluctuated at 10-12 percent.
“Through the review and implementation of the direction of the government, the Ministry of Finance has reviewed and evaluated such interest rate mobilisation has not tended to fluctuate. The Ministry of Finance must continue to monitor and evaluate regularly, if there are abnormalities related to the financial market, we will have appropriate solutions, “Deputy minister Vu Ngoc Mai said.
