Vietnamese Prime Minister Nguyen Tan Dung has okayed issuance of US$1 billion of bonds on the global capital market to mobilize capital for the country’s key projects this year, local Youth newspaper reported Thursday.
PM Dung made the decision at the meeting on the bond issuance project by the Finance Ministry in Hanoi. Three types of bonds will be issued, including government-bonds for re-lending services, corporate bonds with government warrant and unwarranted corporate bonds.
The Government leader requested this year mobilization of $1 billion through bond issues, with maturities of 15 and 20 years, to allocate capital for key projects including Dung Quat Oil Refinery, Vinalines’ cargo ship purchases and Xecaman 3 Hydropower Plant of Song Da Construction Corporation.
Vietnam targets the issue of VND240 trillion, or VND60-70 trillion ($3.8 billion-$4.4 billion) worth of bonds each year, in the 2007-2010 period, to compensate for budget deficits and supplement capital for development investment, according to the Finance Ministry.
In 2006, bond issue proceeds were some VND64 trillion ($4 billion), of which VND33 trillion was allocated to state budget, VND15.5 trillion to transport and irrigation projects and another VND15.5 trillion to development investment.
In October 2005, Vietnam increased the size of its maiden international dollar bond issue to $750 million, from an initial $500 million, after building an order book of $4.5 billion.
In the long term, the country will abolish ceiling coupons in auctions and issuance guarantee for government bonds. In this way, the government expects bond coupons will become standard interest rate references in the financial-monetary market by 2010.
According to Finance Deputy Minister Tran Van Ta, total bond proceeds registered over VND200 trillion over the last 15 years (1991-2005). (Youth, Vnexpress)
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