Proposing banks to lend money to businesses to pay off bond debt

The Ho Chi Minh City Real Estate Association (HoREA) has just sent a document to the Prime Minister proposing a number of solutions on credit and project transfer to remove difficulties for the real estate market.

Accordingly, HoREA proposed that the State Bank allow commercial banks to lend to enterprises to restructure their bond debts that are about to mature. The subjects are enterprises issuing bonds that are about to mature with secured assets, and whose projects have been decided by competent state agencies to allocate or lease land. In which, the loan that can be considered must not exceed 70% of the value of the issued bond package.

Commercial banks are allowed to receive mortgages using this bond package and the secured assets, then the banks will disburse directly to the bondholders.

Proposal that commercial banks be allowed to lend to businesses that issue bonds that are about to mature and have collateral to repay the bonds. Photo: Hoang Ha

For the remaining 30% of the value of the issued bond package, the enterprise and bondholders will negotiate with each other according to the provisions of Decree 08/2023/ND-CP.

HoREA believes that if there is a mechanism, this policy will have an immediate positive impact; together with the policy of Decree 08, it will remove difficulties for businesses issuing bonds that are about to mature and support bondholders.

In addition, the Association proposed that the State Bank direct commercial banks to consider reducing lending interest rates more substantially and, more importantly, creating favorable conditions for businesses, including real estate businesses and home buyers, to access credit.

Along with that, HoREA requested the State Bank to direct commercial banks to consider extending the debt repayment schedule for enterprises according to the policy in Resolution No. 33 of the Government. At the same time, create conditions for real estate enterprises to borrow credit for projects that are fully legal, feasible, and have assets to secure the loan.