Vietnam to Issue US$1B Sovereign Bonds in 2009-10

Vietnam plans to raise US$1 billion from selling sovereign g-bonds in 2009 and 2010 raise funds for state budget, the second of this kind since 2005.

 

The Ministry of Finance will decide bond terms and yields on the condition that coupon on 10-year bonds will be capped at 7% per annum.

 

Most of the fund, US$700 million, will be compensated to the country’s sate budget, and the remaining capital will be allocated to feasible projects of state-run companies, according to a decision signed by Prime Minister Nguyen Tan Dung early this week.

 

Vietnam Oil & Gas Group (PetroVietnam), Vietnam National Shipping Lines (Vinalines), Song Da Corp. and Vietnam Machinery Installation Group (Lilama) are allowed to re-borrow the fund to carry out Dung Quat oil refinery plant, vessel purchasing, Xe Ka Man 3 hydropower plant and Hua Na hydropower plant projects.

 

Vietnam expects to issue the bonds in the U.S. market, Dow Jone newswire reported earlier.

 

In October 2005, Vietnam sold US$750 million worth of bonds offered in the international market at an annual coupon of 7.125%. (Vietnam Economic Times)