Many businesses do not specify the purpose of their issuance. This lack of transparency poses risks to investors, and this risk of default is intensified when companies issue bonds with higher coupon rates, and in turn use the funds they receive through issuances to pay off bank debts or redeem earlier bonds that have reached maturity. In this regard, Decree 81 specifically expands the requirement to disclose the purpose of raising capital through bonds, requesting issuers to specify projects, activities, or business plans needing funds, and debts to be financed. … [Read more...] about Government urges caution on corporate bond risks
Corporate bonds
Corporate bond activity welcome as market shocks persist unabated
“Low and falling government bonds yields can trigger a rush to add risk in order to lock in a higher level of yield. This is not bad in itself – as investors, we are paid a return in order for taking on a risk. However, not all risks are the same and some inevitably turn out to be landmines, especially when the economic cycle comes to an end,” noted Manpreet Gill, head of fixed income, currency, and commodity strategy at Standard Chartered Bank. … [Read more...] about Corporate bond activity welcome as market shocks persist unabated
Investors still pouring money into corporate bonds, despite warnings
Corporate bonds have higher interest rates, by 1-3 percent per annum, than bank deposit interest rates. Besides, corporate bonds are believed to have strong liquidity as distributors will commit to buy back or act as intermediaries to arrange deals when investors want to sell the bonds. … [Read more...] about Investors still pouring money into corporate bonds, despite warnings
Individual investors wary of corporate bonds
Aside from recommendations for individual investors, the Finance Ministry advised enterprises to calculate the cash flow so they can build feasible issuance plans and secure debt solvency. The ministry will coordinate with relevant forces to supervise the market and handle violations. … [Read more...] about Individual investors wary of corporate bonds
Businesses race against the clock to issue bonds
Corporate bond issuance expected to drop after new policies take effect Warnings from management agencies plus new policies that take effect soon will make it more difficult to issue corporate bonds, a capital mobilization channel that was worth $8.5 billion in the first seven months of the year. … [Read more...] about Businesses race against the clock to issue bonds
