Vietnam considering first sovereign US dollar bond sale since 2014: sources
Such a move would relieve pressure on banks which have so far been the main source of lending for domestic investment
Vietnam is contemplating its first sovereign US dollar bond sale in over a decade, according to sources familiar with the talks. The finance ministry is in discussions with investment banks to determine the terms of the issuance, which would be used to fund infrastructure and other projects, according to two of the sources. The move would alleviate pressure on Vietnamese banks, who have primarily provided domestic lending for investment, one source noted.
The sale would also highlight Vietnam's growing openness to foreign financing, following recent actions by the central bank to increase private-sector borrowing and the government's willingness to accept foreign development loans. A foreign lender has proposed a US$1 billion 10-year bond, while another suggests a 10-year bond with an issuance size of US$500 million to US$1 billion and a coupon rate of around 7%.
The finance ministry is yet to make a final decision, as it assesses the borrowing costs at a time of rising global yields due to high oil prices and inflation. Vietnam has sold over US$9 billion in government bonds in the domestic market this year, with an average coupon of 4.2% on 10-year debt. The country last issued an offshore sovereign bond in 2014, raising US$1 billion through a 10-year dollar bond with a 4.8% coupon.
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