Developing the Corporate Bond market- International Experience and Lessons for Vietnam Companies

Q4 Business, Management and Accounting
N. D. Thinh, Vu Ngoc Xuan
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Keywords--business (Es), bonds (B), bond market (BM), corporate bonds (CB), credit rating (CR) _________________________________________________________________________________________________ 1. EXPERIENCE IN DEVELOPING THE KOREAN CORPORATE BOND MARKET 1.1. History of establishment and development Korea's bond market was formed in the early 1950s when the Government issued Country Construction bonds to promote economic development and rebuild the country after the war. After that, businesses also started to issue bonds to attract capital (ADB, 2018). Before 1972, Korean corporate bonds (CBs) were only issued separately by a few large companies. In 1972, bond guarantees were introduced paving the way for the public issuance of CBs. All publicly issued CBs at that time were guaranteed by commercial banks (CBs), securities companies (SC) and financial institutions (FI). Until the mid-1980s, CBs were guaranteed to dominate the Korean CB market. The major investors of CB are investment funds and banks. The loosening of regulations on CBs led to a sharp increase in corporate bond mobilization (Hwang, 2016). Credit rating (CR) is an important criterion for investors in making financing decisions The 1997 Asian financial crisis had a strong impact on the Korean CB market. During the crisis, a number of major issuers went bankrupt. This caused a deterioration in the asset quality of financial institutions that guaranteed bond payments and caused the Korean financial market to freeze. The Korean government tried to restructure the CB market with a series of market infrastructure changes. Thereafter, the CB market has undergone significant structural changes after the crisis. Unsecured bonds gradually replace bonds guaranteed by major financial institutions. The CB market is also becoming more diversified with the introduction of asset-backed securities. This also increases the proportion of foreign investment in the CB market. In addition, the credit rating (CR) criteria of the bonds have also been changed, following a clearer and more transparent orientation. Therefore, the Korean CB market has gradually become a market with many high quality bonds. At the same time, the Government has also implemented many measures to facilitate the issuance of CBs with lower CR: introducing high-interest bond investment funds, launching the institutional investor market with enough conditions. sue and encourage liabilities collateralized by low-rated bonds. These measures have encouraged lower ranked companies to raise more money through the CB market. 1.2. Market situation The Korean CB market can be considered as an effective long-term capital mobilization channel and continuously grows steadily over time. In 2000, the scale release CB South Korea reached 292 trillion KRW only has increased more than 4 times, reaching more than 1,200 trillion KRW in 2017. Asian Journal of Business and Management (ISSN: 2321 2802) Volume 9 – Issue 2, April 2021 Asian Online Journals (www.ajouronline.com) 49 The trading size CB Korean growth also amazing in the past. Basically, the transaction size on the secondary market tends to increase in the period 2000 2017. However, it can be seen that 2003 2007 was the period when the CB market reached a low level, the transaction size translation is only between 50,000 60,000 billion KRW. In contrast, in 2013, the transaction market peaked at nearly 190,000 billion KRW. 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引用次数: 0

Abstract

-Vietnam is in the process of developing into a middle-income country in the world. The widespread epidemic of covid-19 has had a negative impact on most Vietnam enterprises. However, the Vietnamese government's success in disease control has contributed to the recovery of business performance and efficiency. Vietnamese enterprises used to mobilize capital mainly through banking channels. In recent times, bonds are an important longterm capital mobilization tool for businesses, helping businesses reduce their dependence on commercial banks. This article mentions the development of the Vietnamese corporate bond market based on the experiences of several countries around the world. Keywords--business (Es), bonds (B), bond market (BM), corporate bonds (CB), credit rating (CR) _________________________________________________________________________________________________ 1. EXPERIENCE IN DEVELOPING THE KOREAN CORPORATE BOND MARKET 1.1. History of establishment and development Korea's bond market was formed in the early 1950s when the Government issued Country Construction bonds to promote economic development and rebuild the country after the war. After that, businesses also started to issue bonds to attract capital (ADB, 2018). Before 1972, Korean corporate bonds (CBs) were only issued separately by a few large companies. In 1972, bond guarantees were introduced paving the way for the public issuance of CBs. All publicly issued CBs at that time were guaranteed by commercial banks (CBs), securities companies (SC) and financial institutions (FI). Until the mid-1980s, CBs were guaranteed to dominate the Korean CB market. The major investors of CB are investment funds and banks. The loosening of regulations on CBs led to a sharp increase in corporate bond mobilization (Hwang, 2016). Credit rating (CR) is an important criterion for investors in making financing decisions The 1997 Asian financial crisis had a strong impact on the Korean CB market. During the crisis, a number of major issuers went bankrupt. This caused a deterioration in the asset quality of financial institutions that guaranteed bond payments and caused the Korean financial market to freeze. The Korean government tried to restructure the CB market with a series of market infrastructure changes. Thereafter, the CB market has undergone significant structural changes after the crisis. Unsecured bonds gradually replace bonds guaranteed by major financial institutions. The CB market is also becoming more diversified with the introduction of asset-backed securities. This also increases the proportion of foreign investment in the CB market. In addition, the credit rating (CR) criteria of the bonds have also been changed, following a clearer and more transparent orientation. Therefore, the Korean CB market has gradually become a market with many high quality bonds. At the same time, the Government has also implemented many measures to facilitate the issuance of CBs with lower CR: introducing high-interest bond investment funds, launching the institutional investor market with enough conditions. sue and encourage liabilities collateralized by low-rated bonds. These measures have encouraged lower ranked companies to raise more money through the CB market. 1.2. Market situation The Korean CB market can be considered as an effective long-term capital mobilization channel and continuously grows steadily over time. In 2000, the scale release CB South Korea reached 292 trillion KRW only has increased more than 4 times, reaching more than 1,200 trillion KRW in 2017. Asian Journal of Business and Management (ISSN: 2321 2802) Volume 9 – Issue 2, April 2021 Asian Online Journals (www.ajouronline.com) 49 The trading size CB Korean growth also amazing in the past. Basically, the transaction size on the secondary market tends to increase in the period 2000 2017. However, it can be seen that 2003 2007 was the period when the CB market reached a low level, the transaction size translation is only between 50,000 60,000 billion KRW. In contrast, in 2013, the transaction market peaked at nearly 190,000 billion KRW. The reason is that during this period, the Korean Government has implemented a number of policies to increase market transparency, promote bond transactions.
发展公司债券市场——越南公司的国际经验和教训
——越南正处于向世界中等收入国家发展的进程中。新冠肺炎疫情的广泛流行对大多数越南企业产生了负面影响。然而,越南政府在疾病控制方面的成功为企业业绩和效率的恢复做出了贡献。越南企业过去主要通过银行渠道筹集资金。近年来,债券成为企业重要的长期资金筹措工具,帮助企业减少对商业银行的依赖。本文在借鉴世界各国公司债券市场发展经验的基础上,介绍了越南公司债券市场的发展情况。关键字——业务(Es),债券(B),债券市场(BM),公司债券(CB)、信用评级(CR ) _________________________________________________________________________________________________ 1。韩国公司债市场的发展经验1.1。韩国的债券市场形成于20世纪50年代初,当时政府为促进经济发展和战后国家重建而发行了国家建设债券。在那之后,企业也开始发行债券来吸引资金(ADB, 2018)。在1972年之前,韩国的企业债券是由少数大企业单独发行的。1972年,引入了债券担保,为公开发行哥伦比亚广播公司铺平了道路。当时所有公开发行的商业票据都由商业银行(CBs)、证券公司(SC)和金融机构(FI)担保。直到20世纪80年代中期,国内CB市场的主导地位还得到了保证。转债的主要投资者是投资基金和银行。对cb监管的放松导致公司债券动员急剧增加(Hwang, 2016)。信用等级(CR)是投资者进行融资决策的重要标准。1997年的外汇危机对韩国的CB市场产生了很大的影响。在危机期间,许多主要发行人破产。这导致担保债券支付的金融机构的资产质量恶化,导致韩国金融市场陷入冻结。韩国政府试图通过一系列市场基础设施的改变来重组CB市场。此后,转债市场在危机后经历了重大的结构性变化。无担保债券逐步取代主要金融机构担保债券。随着资产支持证券的推出,转债市场也变得更加多元化。这也增加了转债市场的外资比例。此外,债券的信用等级(CR)标准也发生了变化,朝着更加清晰和透明的方向发展。因此,韩国CB市场逐渐成为高质量债券众多的市场。与此同时,政府也实施了许多便利低CR转债发行的措施:引入高息债券投资基金,推出有足够条件的机构投资者市场。鼓励以低评级债券为抵押的负债。这些措施鼓励排名较低的公司通过转债市场筹集更多资金。1.2. 韩国转债市场是长期有效的资金筹措渠道,长期持续稳定增长。2000年规模释放仅CB韩国就达到292万亿韩元,增长了4倍多,2017年达到1200多万亿韩元。亚洲经营杂志(ISSN: 2321 2802)第9卷-第2期,2021年4月亚洲在线期刊(www.ajouronline.com) 49 . CB韩国的交易规模也在过去惊人增长。基本上,二级市场的交易规模在2000年至2017年期间趋于增加。但可以看出,2003 - 2007年是转债市场达到低谷的时期,交易规模换算仅在5 - 6万亿韩元之间。相比之下,2013年的交易市场达到了近190万亿韩元的峰值。原因是,在此期间,韩国政府实施了多项政策,以提高市场透明度,促进债券交易。
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来源期刊
South Asian Journal of Business and Management Cases
South Asian Journal of Business and Management Cases Business, Management and Accounting-Management of Technology and Innovation
CiteScore
1.70
自引率
0.00%
发文量
19
期刊介绍: South Asian Journal of Business and Management Cases (SAJBMC) is a peer-reviewed, tri-annual journal of Birla Institute of Management Technology, Greater Noida (India). The journal aims to provide a space for high-quality original research or analytical cases, evidence-based case studies, comparative studies on industry sectors, products, and practical applications of management concepts. The journal likes to publish problem-solving, decisional and applied types of cases. Such cases must have linkage with theory, at least one dilemma (also known as case issue) and a protagonist around whom the case issue will revolve. Publication of pure research, applied research and field studies with empirical data do not fall under the domain of SAJBMC. Fictitious cases are not welcome.
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