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$250m bond issue to lift foreign reserves
The Ha Noi Stock Exchange will auction bonds worth US$250 million next week, with the aim of raising capital for national projects and boosting State Bank of Viet Nam’s foreign-exchange reserves.
The US dollar-dominated bonds will be issued by the State Treasury and each has a par value of $100. Auctions will be held in three sessions: on Monday for $100 million worth of one-year bonds, on Wednesday for $100 million worth of two-year bonds, and on Friday for $50 million worth of three-year bonds.
The bonds will be listed on the northern bourse, and payment will be made on the date of maturity.
The auction was authorised by Government Decision No211/QD-TTg, which was issued in February. The Government assigned the Ministry of Finance, the Ministry of Planning and Investment and the State Bank of Viet Nam to determine when the best time would be to issue foreign currency-denominated bonds on the domestic equity market.
The bourse, as well as the Ministry of Finance and the State Bank of Viet Nam said that a few commercial banks and foreign institutions had expressed interest in participating in the auction, a Ha Noi Stock Exchange official told Viet Nam News, on condition of anonymity.
The official added that the interest rate of the US dollar was now relatively stable, which should aid dollar-dominated bond auctions.
This is the second time the Government has issued bonds in US dollars this year. In March, $230 million was raised by selling $300 million dollar-denominated bonds, a result viewed as only a "an acceptable" success in the context of the market’s turmoil. In the March auction, one-year bonds paid 3 per cent per year, while two-year bonds paid 3.2 per cent and three-year bonds paid 3.6 per cent.
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