A delegation of Vietnamese officials from MOF and relevant ministries and representatives of three consultancy institutions will fly to the US and possibly London as well. 

The source said that MOF wants to offer to sell shares before the investment season closes and the year-end holiday. If everything goes smoothly, the delegation will leave Vietnam this week.

A series of actions to prepare for the bond issuance were taken promptly after the National Assembly voted for the issuance plan on November 11.

Thoi Bao Kinh Te Sai Gon quoted an expert from a financial institution in HCM City as commenting that it is the right time for Vietnam to issue bonds.

“It would be better to start immediately because the year will end in 1.5 months. We will still be able to implement the plan this year, though I believe the bond sale will still have  favorable conditions in the next six months,” he said.

There are several reasons behind his conclusion.

First, the volume of Vietnamese government bonds in circulation in the international market is modest compared with counterpart countries, and therefore, Vietnam government bonds are considered ‘rare goods’. 

Professional institutional investors which follow the policy on diversifying their investment portfolios have been seeking opportunities to invest in bonds like Vietnam’s.

The analyst’s viewpoint coincides with MOF’s argument that it would be not difficult for Vietnam to call for capital in the international market. An official of the ministry reminded that in 2014, when Vietnam offered to sell $1 billion worth of bonds, international investors registered to buy $10.6 billion.

MOF, when trying to persuade the National Assembly to approve the bond issuance plan and ease the public’s concern about public debt, affirmed that the problem is not  the amount of the debt, but debt solvency.

Second, the US dollar interest rate in the global market is at the bottom level and financiers all believe that the interest rate will have to go up. The FED began loosening monetary policy in October 2014 and it will have to raise the interest rate sooner or later.

Therefore, it would be better to issue bonds at this moment, when the interest rate is still at low level.

Third, Vietnam will not to pay too much to call for capital from the international market as its macroeconomic indexes have improved significantly.

Regarding the bond interest rate, he believes 5 percent for 10-year bonds would be ‘reasonable’.

TBKTSG