Vietnam finance ministry Approves Pilot Project of Bond Swap

Ministry of Finance (MOF) issued Decision No.2904 on Dec 1, approving the implementation of a pilot project on bond swaps.

Under the decision, Treasury bonds listed on the Hanoi Stock Exchange (HNX) with remaining time to maturity of 1.5 years to 2.5 years and without being bound by any secured transactions at the time of swapping are eligible for swap.

Bond swap will ensure the principle of mark-to-market valuation, transparency, and will not increase/reduce the government’s debt and liability in 2011.

Bonds swapping will be implemented in either of the following approaches:

(1) The State Treasury will issue new bonds with indentures and covenants decided by the State Treasury to swap for floating bonds.

(2) The State Treasury will issue additional bonds with indentures and covenants of one floating bond to swap for another floating bond in the market.

MOF will decide the discount interest rate framework to determine the values of both swapped and swapping bonds.

Source Sophie/ StoxPlus.

HNX

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