Phat Dat Property Development Corporation (HOSE: PDR) has just announced the settlement of the ninth bond issue in 2021 (PDRH2123009) with a total par value of VND 150 billion.
No bond repayment pressure
The bonds were issued on 16 December 2021 with a term of 2 years, but the early redemption was made on 25 November 2022 as agreed between Phat Dat and bondholders. According to the Company representative, capital flows are planned to pay off maturing debt, including bonds, from the end of this year to 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 VND 370 billion compared to the data recorded in 3Q2022 financial statements.
After the ninth bond issue was completed, the total loans (short-term and long-term) decreased to VND 4.896 billion, in which the outstanding bond 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 kept this ratio consistently positive (below 0.5).
Increase effects collateral
Phat Dat’s bond issues are secured by PDR shares. Recently, PDR’s stock has fallen due to investor concerns about the less positive macroeconomic outlook and policies related to the real estate market. Shareholders who cannot meet margin calls are also subject to forced selling by securities companies to maintain sufficient shares.
Phat Dat soon added assets to serve as collateral for bond issues. In reality, Phat Dat’s bond value is minimal compared to its entire assets or to other market property developers.
In details, Phat Dat added additional PDR shares and real estate as collateral for the Ninth Bond Issue-2021 (redeemed before the maturity date on November 25, 2022) and the Fifth Bond Issue-20213. The property mentioned is land use rights in Quang Ngai, with an estimated value of about VND 200 billion.
After the fifth bond issue is redeemed, 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 par value of VND 10,000 /share used for calculating PDR shares. In general, all bonds issued by Phat Dat have a fairly good LTV ratio, which secures obligations for bondholders.
Mr. Bui Quang Anh Vu, a Board Member and CEO of Phat Dat, recently shared with the press, confirmed that the Company always pays mortgage interest and principal on time, and the same for loans. This confirmation is supported by sound financial health and the well-prepared resources to develop projects in 2023. Phat Dat is also flexible to change its business tactics to adapt to the changing market.