The process of writing ofCorporate Bonds Issuance Procedure in CT Land Corporation and those comments andevaluations this process made is based on information provided from the Corporati
CORPORATION INTRODUCTION
Introduction
Legal international name: CT LAND CORPORATION
Legal vietnamese name: CÔNG TY CỔ PHẦN BẤT ĐỘNG SẢN CT
Head office: 117 Nguyen Dinh Chieu, Vo Thi Sau Ward, District 3, Ho Chi Minh City, Viet Nam
Website: https://ctland.com.vn/
Email: info@ctland.com.vn
Charter capital: 4,200,000,000,000 VND (in words: four thousand two hundred billion Vietnamdong)
Business sectors: Multi-industry development company, service with 4 main industries including:
1.2 Brief history and development of CT Land
CT Land Corporation was established as a corporation in charge of real estate under
CT Group aims to become a leading urban developer in Vietnam CT Land specializes in real estate development based on the Transportation Oriented Development (TOD) philosophy, which emphasizes developing transport infrastructure as the foundation for comprehensive urban planning Supported by CT Group’s retail systems and subsidiaries, CT Land has evolved for over 30 years, establishing itself as a premier and unique real estate developer Its focus on Transportation Oriented and integrated township development underpins its commitment to sustainable, modern urban growth.
From the initial registered charter capital of only 6 billion VND, until now CT Land's charter capital has reached 4,200 billion VND.
CT Land has implemented a centralized cost center system and multiple profit centers to drive rapid company growth and achieve significant operational cost reductions In line with international best practices, the company recently adopted current IFC Corporate Governance standards to enhance its governance framework and ensure sustainable development.
CT Land operates nationwide, with its headquarters based in Ho Chi Minh City, and boasts over 30 branches and transaction offices across various provinces and cities, ensuring extensive reach and accessibility.
Mission – Core values
CT Land aims to develop sustainable cities powered by 3 key factors:
Deliver the dream working environment, the basis for comprehensive human development.
CT Homes, commercially known as “DIYAS,” is the first housing product line utilizing 4.0 technology to serve the affordable housing market To meet the significant demand for affordable housing, CT Land aims to provide 100,000 studio apartments between 2021 and 2025, with plans to expand this to up to 1,000,000 units by 2045.
The CT Town product line specializes in projects under 3 hectares, strategically situated in prime locations within Ho Chi Minh City These developments are located in the heart of District centers and along major arterial roads, including Pham Van Dong Avenue, Ha Noi Highway, Ring Road 2, and Metro Lines No 1 and 2 Positioned in high-demand areas, CT Town offers excellent accessibility and investment potential for buyers seeking prime urban real estate.
CT World is the flagship long-term strategy product line of CT Land, leveraging over 30 years of expertise from CT Group It integrates the company's extensive experience in master planning, deep market understanding, and successful development of diverse retail establishments, including retail chains, mega malls, and commercial food and entertainment centers CT World aims to create thriving ecosystems within townships and mega townships, positioning itself as a leader in comprehensive urban development solutions.
CT Com specializes in commercial assets with flexible layout designs tailored to diverse business needs, ranging from small spaces of just 10 m² to expansive areas of up to 200,000 m² Our offerings include commercial, office, and logistics spaces situated along major commercial and financial corridors in vibrant city centers Additionally, CT Com develops tourism projects that embody the principles of unity and harmony between people and nature, ensuring sustainable and aesthetically appealing environments.
Business Structure
Playing a powerful role of real estate segment of CT Group, the scale and organizational structure of CT Land is extremely clear and professional.
General shareholders: the owners of CT Land, provide financial backing for potential dividends (profits) of the corporation.
Board of directors: to recruit, keep track, direct the company’s plans.
CEO/President: to be responsibilities for their major department in a whole, manage the operation.
To advise and assist the Directors in synthesizing, developing and implementing work programs and strategies; Synthesize planning, finance, investment in development of science, technology and innovation.
Manage revenue, quantity, liabilities, inventory, fixed assets
To monitor and check the quality of work and products of other departments to provide customers with high quality service.
Building PR and marketing strategies for products in each segmentation…
3.2 Position during the mid-course internship and duties undertake
The financial function is divided into two main departments: Finance and Accounting, with this focus specifically on the Finance Department Typically, the back office is responsible for preparing the company's financial statements, maintaining accurate records, and determining product pricing Meanwhile, the front office handles customer interactions and external communications, ensuring seamless service delivery Understanding these roles is essential for optimizing financial operations and enhancing business performance.
Right from the beginning of the internship at CT Land Corporation, the author was assigned by the Finance Manager – Nguyen Thi Minh to undertake the following tasks:
To have basic understanding of legal brief of Real Estate projects, the author would regularly research the relevant documents and related laws/regulation.
To get enough documents to standardize a dossier, the author had the opportunity to contact other departments.
To effectively present the company's projects and products, the Head of Department assesses the author's knowledge acquisition and research abilities to ensure they can serve as a reliable contact This process involves direct engagement with project data, including sales performance, financial statements, and regulatory compliance procedures, confirming the author's expertise and readiness to represent the project professionally.
The author gained a deeper understanding of the characteristics and structure of the corporate bonds issued by CT Land Corporation through the assigned tasks This insight was crucial for accurately analyzing the company's financial instruments Acquiring this knowledge enabled the author to complete the report with a comprehensive and informed perspective, enhancing the report's overall quality and credibility.
Business situation period 2018 – 2021
Between 2019 and 2021, the economy and real estate markets experienced significant fluctuations due to the COVID-19 pandemic, impacting overall business performance Despite these challenges, the data indicates resilient trends in the real estate sector, as shown in the accompanying table This period highlights how the pandemic influenced market dynamics while demonstrating the sector's ability to adapt and recover over time.
Source: Consolidated Financial Statements in 2018,2019,2020,2021 of CT Land
In 2019, City Land experienced remarkable growth in total assets, revenue, and profit Total assets reached 7,167.3 billion VND, representing a 33.11% increase compared to 2018, driven by a series of mergers and acquisitions of subsidiary companies As a result, the company achieved significant progress in operating revenue, showcasing its strong financial performance and strategic expansion efforts.
By the end of 2020, CT Land's bank loan to total assets ratio was only 6%, indicating a strong financial position, with no bonds outstanding According to the Credit Information Center (CIC), CT Land has maintained a clean credit record over the past five years, with no outstanding credits, which is significantly lower than the industry average of approximately 60% This demonstrates CT Land’s solid financial health and significant growth potential moving forward.
CT Land's revenue experienced an extraordinary growth rate of 2121.9%, primarily driven by the successful construction of new projects and the operationalization of existing ones This significant increase is also attributed to improved collections of short-term receivables from sales of goods and service provision to customers.
2020 was a challenging year for CT Land, as the company experienced a significant decline in revenues and profits compared to the previous year Revenue dropped by over 57.6% from 2019, and pre-tax profit plummeted to 95.78 billion VND, reflecting an 85% decrease primarily due to the impacts of the COVID-19 pandemic The entire real estate industry was negatively affected by the broader economic downturn, making this decline understandable However, drawing lessons from 2020 and implementing contingency plans, CT Land’s management carefully observed the market and assessed financial impacts, which contributed to a modest but positive recovery signal in 2021.
CORPORATE BONDS ISSUANCE PROCEDURE IN CT LAND CORPORATION
Analysis of corporate bonds issuance procedure in CT Land Corporation
Issuance agency: Bao Viet Security ar value: 100,000,000 VND/bond
Step 1 Fin Dep cooperates with the Issuer to develop and submit the plan of issuance corporate bonds
Develop a strategic plan for issuing corporate bonds in alignment with the CT Land project’s business plan and development objectives This approach aims to mobilize necessary capital to fund project construction and support subsequent reinvestment, ensuring sustainable growth and successful project execution.
FD submits the corporate bond issuance plan to the Assistant General Director/Board of Directors for review If the plan is deemed unsuitable, adjustments are requested; if considered appropriate, the plan is approved, ensuring a thorough and efficient approval process.
Step 2 Conduct bond issuance procedure
FD registers business information on the Stock
+ Issuer registers email of the Stock Exchange.
+ The issuer registers to use the corporate bonds specialized website.
FD and Issuance agency directly work together (consultants and issuance agency) FD will collect company information (the Issuer) for the disclosure.
+ Securities company advises on the organization and implementation of procedures related to bond issuance.
+ FD prepares full legal procedures for projects related to bond issuers.
FD/Issuers signs a number of contracts with securities companies:
+ Consulting contract and bond issuance agency.
+ Agency contract for registration, depository, payment and management of Bond transfer.
Securities company plays the role:
+ Consult and review necessary legal procedures.
+ Consulting on the release plan.
+ Underwriting of Bonds Issuance / Intermediaries for buying and selling Bonds.
+ Distributing Bond products thanks to a diverse network of institutional and individual customers.
+ Prepare bond purchase and sale documents and guide the issuer of the procedures after the bond issuance.
FD/issuers collaborated with the bank by signing essential contracts, including an account management agreement and the opening of a blocked account to receive bond issuance funds They also established a guaranteed asset management contract and a mortgage of collateral agreement, with notarization and registration of secured transactions conducted with relevant authorities.
Step 3 Disclosure before the offering
The Corporation announces the issuance of bonds to investors and promptly submits the relevant information disclosure to the Stock Exchange According to regulations, the company is committed to completing the bond distribution within 90 days from the date of disclosure, ensuring transparency and adherence to legal requirements.
- Securities companies and FD/Issuer conduct a research and make a list of investors wishing to purchase Bonds.
To purchase bonds, investors must qualify as professional investors, including commercial banks, financial institutions, and securities companies Additionally, companies with charter capital exceeding 100 billion VND or those that are listed or registered for trading are eligible Individual investors must either hold listed securities valued at a minimum of 2 billion VND or have a taxable income of at least 1 billion VND in the most recent year, ensuring they meet the criteria for professional bond investors.
Provide and clarify information for investors, guide the procedure for buying Bonds for investors When an investor decides to buy a bond, processing as follow:
+ Bond purchase and sale Contract.
Collect funds from investors to purchase bonds according to the agreed terms outlined between the investor and the issuer, or through the agreement established between the issuer and the bank managing the creditor's account.
Securities Company confirms ownership of Bonds and sends depository information an issue the Certificate of Bond ownership to the Buyer after the Buyer has completed the payment.
Step 5 Report on Bond Issuance Results
Report the results of bond issuance to the Stock Exchange within 10 days from the end of the bond issuance The official report would be notified on the specialize website.
Step 6 Follow up after bond issuing
The FD/Issuer conducts quarterly monitoring and reporting to the Stock Exchange to ensure transparency and compliance They coordinate with the account management bank to effectively oversee the proceeds from bond issuance Additionally, they disburse project funds only when there are sufficient and appropriate payment documents, ensuring responsible financial management.
Step 7 Summarize and save documents
The FD/Issuer regularly monitors and disburses bond principal and interest payments as scheduled, ensuring timely financial management They provide transparent disclosures and detailed reports to bondholders, depository institutions, and the Stock Exchange to maintain transparency and compliance All relevant records are systematically collected, stored, and maintained by the Issuer, FD, and AD in accordance with CT Land's regulatory requirements, ensuring accurate documentation and regulatory adherence.
A commitment involves agreeing to pay all or part of the interest and principal upon maturity, utilizing the issuer's assets or third-party assets in compliance with secured transaction laws This ensures a legally binding obligation to fulfill the repayment, providing security for investors Proper adherence to legal regulations on secured transactions is essential for validating the commitment and safeguarding asset interests.
The Léman Cap Residence project in Vung Tau serves as collateral, encompassing land use rights and future-formed assets The contract value for this project is XX, as assessed by the Vietnam Assessment and Evaluation Assets Joint Stock Company (VAAE) This comprehensive collateral arrangement underscores the project's substantial value and strategic significance.
Additional measures: payment guarantee by CT Land Corporation.
The evaluation of corporate bonds issuance procedure in CT Land Corporation 22 1 Strengths
Successful bond issuance involves essential steps that enable a company to access the capital markets effectively By leveraging their strong reputation and attractive yields, companies can attract significant investment from bond buyers, facilitating growth and project financing In this case, the company's bond issuance has supported the Metro Star project and contributed to its strategic growth plan Utilizing corporate leverage through bond issuance helps increase profits despite impacts on asset-to-capital ratios, positioning the company for a projected revenue surge of 8,600 billion by 2025.
The Finance Department operates with an independent yet collaborative approach, empowering team members with the authority to make decisions on assigned tasks Flexibility is key, as staff can coordinate with colleagues or the entire committee to address questions or issues In case of incidents, employees are encouraged to resolve problems within their capacity or seek support from peers before consulting senior management such as the department head or CFO, ensuring efficient and proactive financial operations.
In 2021, the real estate sector issued bonds valued at approximately 200,000 billion VND, representing about 33.16% of the total corporate bond issuance When analyzed based on overall market capitalization, the real estate industry holds a significant share of around VND 1.56 million billion, accounting for approximately 21% of the total market value.
In April 2022, Tan Hoang Minh mobilized VND 10,000 billion through bonds, highlighting the real estate sector's significant influence Despite this, the domestic bond market remained predominantly dominated by the banking sector, accounting for 90.7%, with no new bond issuances from real estate companies Overall, the bond market's total value reached VND 16,472 billion, marking a 23.2% decline compared to the previous month.
Real estate companies often rely on bond issuance to meet their significant capital needs, but this method alone is insufficient to cover the industry's demand for liquidity To ensure sustainable growth, it is essential to diversify funding sources and mobilize capital from multiple channels Strict regulation of bond issuance is crucial to prevent misuse and market manipulation, safeguarding investor interests and maintaining financial stability in the real estate sector.
Tightening bonds issuance regulations: Decree No 153/2020/ND-CP dated December
On October 31, 2020, regulations were introduced governing the private offering and trading of corporate bonds in the domestic market, as well as their issuance to the international market These regulations impose restrictions on issuers regarding the purpose of bond issuance, aiming to limit the use of proceeds Typically, corporate bonds are used to finance mergers and acquisitions (M&A), including share acquisitions or project-based investments Compliance with these regulations is essential for companies seeking to issue bonds domestically or internationally while ensuring transparency and adherence to market standards.
CT Land, a private issuer of corporate bonds in a separate tranche, is directly impacted by Decree 153's stricter regulations Currently investing in two main projects, CT Land's revenue is tied to construction progress, resulting in unstable cash flow and a low liquidity ratio Tightening the government's bond issuance rules will pose significant challenges for CT Land's future operations and project financing.
CHAPTER 3: LESSON LEARNED AND RECOMMENDATIONS FOR
IMPROVING THE EFFECTIVENESS OF CORPORATE BONDS ISSUANCEPROCEDURE IN CT LAND CORPORATION
Lesson learned from the practice study and the internship period
During my internship at CT Land Corporation, I gained valuable insights into the finance department at BO, which allowed me to apply my university knowledge and enhance my skills The enthusiastic internship supervisors provided guidance, important tips, and shared their experienced insights, creating a supportive environment This mentorship helped me feel confident and comfortable throughout the internship, enriching my professional development.
Accordingly, the author has accumulated a number of lessons for himself as follows:
During my university lectures, I gained theoretical knowledge on bond analysis, evaluation, and issuance processes, which was significantly deepened through practical internship experience in a real estate company I initially faced challenges understanding the complex steps involved in bond issuance and struggled with academic approaches to information systems and professional report writing The real-world process proved more complicated than classroom theory, leading to some confusion However, with the enthusiastic guidance and support from Team BO, I learned valuable insights not only about the issuance process but also about related operations such as M&A, IPO, due diligence, and financial statements These experiences enhanced my understanding of the responsibilities and skills required of a real estate sector expert.