VietNamNet Bridge - Two weeks ago, the Ministry of Finance (MOF) organized a non-deal roadshow for the Vietnam’s $3 billion international bond issuance campaign, scheduled to be launched in 2016.

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HCM City, Vietnam

This was the second time that MOF has organized a roadshow to listen to news in the international market since November, when the National Assembly approved the 2015-2016 international bond issuance plan.

The first roadshow took place late last year which led to the decision to delay the issuance plan as the conditions were not favorable. 

“MOF and relevant ministries and branches are introducing the economy about the international investment community, taking important steps to prepare for $3 billion bond issuance program,” Truong Hung Long, head of the MOF’s Debt Management and External Finance Department told the press last week.

However, Long said MOF still has not made a final decision on the time for bond issuance.

“We will issue government bonds in the international market if the capital mobilization in the domestic market meets difficulties, and if there are favorable conditions in the world market like in 2014 which allow foreign capital at low cost,” Long said.

Some analysts think that MOF missed a good opportunity to issue bonds after it organized the roadshow last December, believing that the ‘favorable conditions’ Long mentioned may not turn up in 2016.
Some analysts think that MOF missed a good opportunity to issue bonds after it organized the roadshow last December, believing that the ‘favorable conditions’ Long mentioned may not turn up in 2016.

In late 2015, the US Federal Reserve (FED) officially raised the prime interest rate after a lot of delays. This means that Vietnam will have to offer higher interest rates if it wants to attract international investors.

Meanwhile, a banking expert noted that with the high public debt ratios reported by the government, Vietnam’s government bonds may become less attractive.

He went on to say that MOF should issue bonds in the international market in the second quarter of 2016, or before the investors’ summer holiday at the latest.

“Even if the conditions become less favorable than the last year’s, MOF should issue bonds as soon as possible, because the more MOF delays the plan, the higher risk it would face,” the expert said.

At present, issuing dong bonds in the domestic market remains the major capital mobilization channel for the government. 

However, analysts warned that the dong bond market would get weaker. Official reports showed that the ratio of bonds sold on the total amount of bond offered decreased from 96.6 percent in February to 76.2 percent in March.

Most recently, at the March 30 bond auction, only VND2 trillion worth of bonds were sold out of VND5 trillion worth of bonds offered.

MOF has been advised to issue bonds in foreign currencies in the domestic market, in case it meets difficulties with the dong bond.


TBKTSG