Phat Dat Real Estate Development Corporation (HOSE: PDR) has just announced the completion of the ninth bond issue in 2021 (PDRH2123009) with a total nominal value of VND 150 billion.
No bond redemption pressure
The bonds were issued on December 16, 2021 with a duration of 2 years, but the early redemption was carried out on November 25, 2022, as agreed between Phat Dat and the bondholders. According to the company representative, capital flows have been planned to pay off maturing debts, including bonds, from the end of this year until the end of 2023.
Recently, on October 21 and 25, 2022, Phat Dat settled capital loans worth VND 220 billion for Mirae Asset Financial Group (Korea). Thus, Phat Dat’s outstanding loans decreased by 370 billion VND compared to the data recorded in the financial statements of 3Q2022.
After the finalization of the ninth bond issue, total loans (short-term and long-term) fell to VND 4.896 billion, of which outstanding bonds decreased to VND 2.698 billion. Thus, the “Debt (short term & long term)/Equity” ratio is calculated at 0.47, compared to 0.51 at the end of 3Q2022. Since 2Q2020, Phat Dat has consistently maintained this positive ratio (below 0.5).
Increase the bond guarantee
Phat Dat bond issues are secured by PDR shares. Recently, shares of PDR have fallen due to investor concerns over the less positive macroeconomic outlook and policies related to the real estate market. Additionally, shareholders unable to meet margin calls are subject to forced selling by securities firms to maintain sufficient equity.
Phat Dat quickly added assets to serve as collateral for bond issues. In truth, the value of Phat Dat’s bonds is minimal compared to all of its assets or other real estate developers in the market.
In detail, Phat Dat has completed additional PDR shares and real estate as collateral for the ninth bond issue-2021 (redeemed before the maturity date of November 25, 2022) and the fifth bond issue-20213. The assets mentioned are land use rights in Quang Ngai, with an estimated value of around VND 200 billion.
After redemption of the fifth bond issue, the total collateral assets available for the fifth bond issue in 2021 is estimated at VND 316.2 billion, and the new LTV (loan balance/collateral value) ratio is 63 %, with a nominal value of 10,000 VND. /share used for calculating PDR shares. Generally, all bonds issued by Phat Dat have a fairly good LTV ratio, securing bonds for bondholders.
Sharing with the press recently, Mr. Bui Quang Anh Vu, Board Member and CEO of Phat Dat, affirmed that the company always pays the interest and principal of the bonds on time, and the same goes for the loans. This assertion is supported by good financial health and well-prepared resources to develop projects in 2023. Phat Dat is also flexible in modifying its business tactics to adapt to changing market conditions.