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Updated December 27th, 2023 at 16:18 IST

Vietnam raises $73.78 mn in Government Bond auction

There has been a significant increase in redeemed corporate bonds before maturity, amounting to $9.49 billion as of December 22.

Reported by: Business Desk
Vietnam
Vietnam | Image:Pexels
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Vietnam recently conducted a government bond auction, securing 1.798 trillion dong ($73.78 million) on the Hanoi Stock Exchange. This marked a decrease from the $146 million collected in the prior week's auction.

The State Treasury offered various bonds: 1 trillion dong in 10-year bonds with a 2.2 per cent coupon and 780 billion dong in 15-year bonds with a 3 per cent coupon. However, there were no takers for 1 trillion dong of 5-year bonds and 3.45 trillion dong of 15-year bonds.

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From government bond sales, Vietnam accumulated 298.5 trillion dong, averaging a tenor of 12.58 years and a coupon of 3.21 per cent annually, the State Treasury reported.

Corporate bond issuance

Additionally, private placements saw 26 corporate bond issuances in December, totaling 16.78 trillion dong ($688.55 million) based on Vietnam Bond Market Association (VBMA) data as of December 22. Throughout the year, corporate bond issuances hit 273 trillion dong via 283 offerings, mostly through private placements, contrasting with 420 offerings in the preceding year.

Stricter rules on refinancing

In response to the unchecked nature of the domestic credit market, Vietnamese regulators have imposed stricter rules on corporate bond issuance and constrained their refinancing. This approach aimed to curb risk-taking within this largely unregulated sector.

According to VBMA, there has been a significant increase in redeemed corporate bonds before maturity, amounting to $9.49 billion as of December 22. This figure reflects an 8.5 per cent surge compared to the previous year and represents 84.4 per cent of the total issuance value. 

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(With Reuters inputs)

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Published December 27th, 2023 at 16:18 IST

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