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Banking & Finance

Vietnam plans $1 billion bond issue in 2015

Released at: 17:03, 29/12/2014

Vietnam plans $1 billion bond issue in 2015

The Ministry of Finance (MoF) has proposed another bond issuance given the success of the recent issue.

by Yen Thanh

Vietnam plans to issue an additional $1 billion worth of government bonds to the international capital market next year following its successful bond sale in November.

In 2015 it will not borrow from any other foreign sources and will only issue sovereign bonds to the global market, Minister of Finance Dinh Tien Dung told a conference held to review 2014 and set missions for the finance sector in 2015. The purpose of the method of borrowing is to balance the State budget and take advantage of the international market following the success of the last issuance.  

“The Ministry of Finance will report to the government on its ability to issue more sovereign bonds in the future, to continue actively restructuring the current debt portfolio,” the MoF stated on its website in early November.

The November issue has a fixed interest rate of 4.8 per cent per annum, lower than the expected 5.125 per cent and the lowest rate in recent sovereign bond issuances. Sovereign bonds issued in 2005 and 2010 had interest rates of 6.875 per cent and 6.755 per cent, respectively.

According to the MoF, 437 international investors subscribed for the recent bond offering with a total registered value of $10.6 billion, or more than ten-times the amount offered for sale. The total par value registered for the bond swaps, which were then accepted, was $726.6 million, including $436.5 million issued in 2005 and over $290 million issued in 2010.

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