Vietnam to re-examine $1 billion bond sale ‘given the reality’
Vietnam’s government will re-examine a plan to sell US$1 billion worth of foreign currency-denominated bonds because of turmoil in global markets, a deputy prime minister said.
“We have a plan to issue a bond in the international market,” Deputy Prime Minister Pham Gia Khiem told Bloomberg News during a visit to New York. “But given the reality now, we need to consider the plan, so that we can make adjustments in accordance with reality,” he said, without elaborating.
Vietnam sold its first foreign-currency bond in 2005, with demand for more than six times the $750 million on offer. Vietnamese Prime Minister Nguyen Tan Dung requested the government carry out a second, $1 billion sale “within 2007,” according to a government statement in April of that year.
That plan was shelved as demand for emerging market bonds weakened in late 2007. Finance Minister Vu Van Ninh said in January that Vietnam needs “stable” global markets to sell debt. By May, the government also wanted to see slower inflation and a recovery in local financial markets before any bond sale, according to the Viet Nam News.
Khiem declined to comment on any possible adjustments to the timing of any debt sale, or on whether state-owned companies would be permitted to move ahead with their plans to sell bonds. Vietnam Airlines, Vietnam Oil & Gas Group and Electricity of Vietnam have said in the past they are interested in selling debt denominated in foreign currencies.
“The relevant agencies of the government will look into the situation and then will make decisions in accordance with reality,” Khiem said.
Vietnam’s inflation rate slowed this month for the first time since January 2007, with the year-on-year figure in September at 27.9 percent, down from 28.3 percent in August.
Fighting inflation “is the top priority of the government in 2008,” Khiem said.
Some of proceeds from Vietnam’s second overseas debt sale were slated to be lent to state-owned Vietnam Shipping Lines for the purchase of container vessels and to state-owned Song Da Corporation for hydropower plants, according to the April 2007 government statement. The proceeds of the first bond sale were lent to the Vietnam Shipbuilding Industry Group.
Vietnam is “cutting down on public investment to maintain macroeconomic stability,” according to written replies to questions sent by Bloomberg News to the Vietnamese mission at the United Nations in New York.
Thanhnien
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