Vietnam sells $1bn sovereign bond, first in nearly 5 years

Vietnam sells $1bn sovereign bond, first in nearly 5 years

Vietnam has sold a new sovereign bond of US$1 billion – the first in nearly five years and the third in its history – in the U.S., the Ministry of Finance announced Friday.

The Thursday issue has a ten-year maturity and yield of 4.8 percent, according to the ministry. The 4.8 percent yield is 2.39 percentage points over similar-maturity U.S. Treasuries, according to data compiled by

Bloomberg.

“The issue of ten-year sovereign bonds worth $1 billion was successfully conducted at 1:00 pm local time in San Francisco, on November 6,” the ministry said on its website.

The finance ministry said Deutsche Bank, HSBC, and Standard Chartered Bank were hired for the global bond investor road shows.

Vietnam’s bond sale came only three days after Fitch Ratings upgraded the country’s sovereign ratings by one notch on Monday.

The Southeast Asian country’s long-term foreign and local currency issuer default ratings were raised to ‘BB-‘ from ‘B+’, three notches below investment levels, while its outlook was revised downward to ‘stable’ from ‘positive’, according to Reuters.

Fitch said in a report the upgrade reflects improved macroeconomic stability and stronger external balances.

The plan to sell a new sovereign bond was intended to swap for debt issued in 2005 and 2010, according to Reuters.

In 2010, the government picked Barclays Capital, Citigroup, and Deutsche Bank as joint lead managers for the issuance of a $1 billion ten-year sovereign bond, Reuters reported last week.

In 2005, the Southeast Asian country sold $750 million worth of sovereign bonds maturing in 2016.

Outstanding notes from these issuances can now be switched into the new issue or tendered for cash, according to economic newswire The Saigon Times Online.

The finance ministry said 437 international investors had registered to buy the bond at a total value of $10.6 billion, ten-fold the amount priced by Vietnam.

The upgrade from Fitch Ratings allowed Vietnam to issue the bond at a lower yield than in 2005 and 2010, creating favorable conditions for Vietnamese businesses to attract capital from the global market at more reasonable interest rates, according to the ministry.

The 2005 bond was sold at 6.875 percent a year, and 6.755 percent in 2010, the ministry said on its website.

Like us on Facebook or follow us on Twitter to get the latest news about Vietnam!

Vietnam sells $1bn sovereign bond, first in nearly 5 years Related image(s)