Vietnam Considers First USD Bond Issuance in a Decade to Diversify Funding

Vietnam's Ministry of Finance is considering its first US dollar-denominated government bond issuance in over a decade and is in discussions with investment banks regarding potential terms, Reuters reports. The move comes as Vietnam aims for annual economic growth of at least 10% until 2030, with proceeds intended for infrastructure and other projects. This issuance would also help alleviate pressure on Vietnamese banks, which have historically been the primary source of domestic investment capital. The potential dollar bond offering further signals Vietnam's increasing openness to foreign capital, following recent actions such as the State Bank of Vietnam raising overseas borrowing limits for the private sector and the government agreeing to accept development loans from abroad. According to a banker who attended a meeting with the Ministry of Finance, one foreign investment bank proposed a 10-year bond issuance worth $1 billion. Another source familiar with the proposals indicated that a different lender suggested a 10-year bond ranging from $500 million to $1 billion with an interest rate of around 7%. However, two Vietnamese officials stated that the Ministry of Finance has not yet made a final decision, as it is assessing borrowing costs amidst rising global bond yields driven by escalating oil prices and inflation. The Ministry of Finance did not respond to Reuters' request for comment. As of this year, Vietnam has issued approximately $9 billion in domestic government bonds, with an average 10-year yield of 4.2%, a rise from 3.1% last year. Vietnam's last international government bond issuance was in 2014, raising $1 billion for a 10-year USD bond at a 4.8% interest rate, according to chinhphu.vn. At that time, financial expert Dr. Pham Do Chi commented that it was a "correct action" to meet capital needs without impacting foreign exchange reserves. He suggested that issuing USD bonds would "ease investors' concerns" about currency depreciation, thus making domestic and foreign investors "more confident." Vietnam first issued USD government bonds internationally in 2005, raising $750 million. The bonds were listed on the Singapore Stock Exchange with an interest rate of over 6.8%. Now, Vietnam is once again considering a USD bond issuance in a new context. Currently, Vietnam's public debt is at a relatively low level of 37% of GDP. However, the country has long maintained strict controls on its financial system and foreign borrowing. Nevertheless, Hanoi has become more open to foreign borrowing in recent months, as the Communist Party, under the leadership of General Secretary and President To Lam, pushes for strong growth amidst increasingly uncertain global trade, according to Reuters. Vietnam aims for double-digit growth from now until 2030, with public investment and credit growth as key drivers. According to the State Bank of Vietnam, Vietnamese commercial banks have seen credit growth significantly outpace deposit growth since at least 2021. Bankers say they are facing funding pressure, while regulators want to curb interest rates. The State Bank of Vietnam has given the green light for several commercial banks and businesses to seek foreign capital. For instance, in June 2026, VPBank announced it had signed a loan agreement worth $1.44 billion from a foreign partner. In April 2026, Vingroup, Vietnam's largest private conglomerate, announced plans to issue up to $350 million in 5-year international bonds with a maximum interest rate of 5.75% per annum. The company's bonds are expected to be listed on the Vienna Stock Exchange, according to Bao Dau Tu. Vingroup also plans to issue up to 455 billion won (over $330 million) in bonds in the second half of 2026, according to the company's board resolution. Meanwhile, the Vietnamese government has also agreed to accept development loans from Japan and Germany, after a period of deciding not to utilize billions of dollars in development funds in recent years, according to chinhphu.vn and Reuters. © 2026 BBC. BBC is not responsible for the content of external sites. Learn how we approach external linking. Information Source: BBC Vietnamese