Real estate companies accounted for nearly 60 percent of corporate bond issuance in July as tighter bank credit and funding pressures pushed businesses to raise capital through the bond market.
As the banking system faces liquidity pressures and its ability to provide medium- and long-term financing continues to narrow, many businesses particularly real estate developers have returned to the corporate bond market to raise capital.
Real estate accounts for nearly 60 percent
After the Government issued Decree No. 200/2026/ND-CP on private domestic corporate bond offerings, trading, and international corporate bond issuance, which took effect in early June 2026, the corporate bond market became more active. According to the Vietnam Bond Market Association (VBMA), total corporate bond issuance reached VND124.4 trillion (US$4.78 billion) in June 2026, the highest monthly level in a year.
During the first three weeks of July 2026, the market recorded 10 private bond issuances, with real estate companies accounting for nearly 60 percent of the total. The two largest issuers were Vinhomes and Crystal Infrastructure Construction Company. The banking sector ranked second, led by HDBank and VPBank. As of July 24, total corporate bond issuance had reached VND281.205 trillion, up about 2 percent from a year earlier.
According to research by MBS Securities (MBS Research), the average corporate bond yield in the first six months of 2026 was estimated at 9.4 percent, compared with 7.3 percent in 2025. Persistently high bank deposit rates have forced companies to offer higher bond yields to attract investors.
At the same time, tighter credit controls on the real estate sector have prompted developers to turn to the bond market despite higher financing costs. In July, average bond yields for real estate companies reached 12.5 percent per year. Bond issuance yields for commercial banks have also risen to more than 9.5 percent annually.
Nguyen Duong Phuong, head of analysis at Shinhan Securities Vietnam (SSV), said fundraising in the primary market from households and economic organizations has failed to keep pace with credit growth, forcing banks to raise more funds through bond issuance and establishing a new benchmark for bond yields in 2026.
Developing alternative funding channels reduces reliance on bank credit
Amid mounting liquidity pressures on the banking system, many experts argue that the economy can no longer rely excessively on bank lending and instead needs to develop multiple funding channels.
Dang Nguyet Minh, Director of Research at Dragon Capital, warned: “Excessive reliance on bank credit has driven up corporate financing costs. Interest rates have increased by 2 percent to 2.5 percent since the beginning of the year, and even more for some sectors. As banks gradually adopt international standards and reduce the ratio of short-term funds used for medium- and long-term lending, financing cost pressures will continue to increase.”
Bui Hoang Hai, Vice Chairman of the State Securities Commission, said Vietnam’s credit-to-GDP ratio of about 146 percent is not unusually high compared with many other countries. However, the capital adequacy ratio (CAR) of commercial banks stands at only about 12 percent, below the common range of 15 percent to 18 percent in many markets. Meanwhile, banks rely mainly on short-term deposits while demand for medium- and long-term financing continues to grow, creating significant pressure on the banking system.
From the perspective of commercial banks, Chairman Nguyen Thanh Tung of Vietcombank’s Board of Directors also said there is limited room to further expand lending, particularly given the substantial financing needs of upcoming large-scale projects. Therefore, accelerating the development of the capital market, especially the corporate bond market—which currently equals only about 10 percent of GDP, well below levels in many regional economies—has become an urgent priority.
To strengthen investor confidence, experts say a mechanism is needed to allow banks to act as collateral managers for corporate bond issuances. Currently, many corporate bonds are secured by real estate or assets created with borrowed funds, making investors cautious, while only credit institutions are qualified to manage such collateral. Better coordination between the banking and financial sectors would provide fresh momentum for the corporate bond market.
At a recent Government conference with the business community, themed “Removing Bottlenecks – Unlocking Resources – Promoting Growth,” State Bank of Vietnam Governor Pham Duc An said the central bank has proposed to the Government amendments to the Law on Credit Institutions that would allow commercial banks to provide asset management services for corporate bond issuance. The proposal is expected to support the development of the capital market and reduce the banking system’s burden of supplying medium- and long-term financing.
By Hanh Nhung – Translated by Anh Quan