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Vietnam's weekly government bond auction raised 1.32 trillion dong (USD 50 million), much lower than the USD 232 million raised previously, with only 10.1% of bonds sold. Coupon rates reached their highest levels this year, reflecting rising borrowing costs. Government bond sales in 2025 have now reached 256.2 trillion dong (USD 9.72 billion), funding public investment projects vital for economic growth. Corporate bond issuances total 424.4 trillion dong (USD 16.06 billion), with significant maturing bonds in real estate (38.9%) and banking (28.6%). Investor demand is cautious, and higher yields may be needed to attract buyers.
Vietnam's State Treasury raised 1.32 trillion dong (USD 50 million) in its weekly government bond auction, a sharp drop from the USD 232 million raised in the previous week. Investor participation was notably lower, with only 10.1% of the bonds on offer being sold, compared with 47.4% at the last auction, according to a filing by the Hanoi Stock Exchange. This weak demand signals a cautious approach by investors, even as the government continues to rely on bond sales to fund key public projects. Advertisement
The auction brought total government bond sales this year to 256.2 trillion dong (USD 9.72 billion). These proceeds are mainly used to finance public investment projects, which are an important driver of Vietnam's economic growth. The government aims to raise a total of 500 trillion dong (USD 18.95 billion) this year to meet development funding requirements.
During the auction, only 400 billion dong (USD 15.16 million) of the 3 trillion dong (USD 113.6 million) 5-year bonds were sold, at a coupon rate of 3.14%. The 10-year bonds also faced low demand, with just one-tenth of the 8 trillion dong (USD 302.7 million) on offer being subscribed at a coupon of 3.73%. For 15-year bonds, 90 billion dong (USD 3.41 million) out of 1.5 trillion dong (USD 56.8 million) were sold at 3.79%, while 30-year bonds sold only 28 billion dong (USD 1.06 million) of the 500 billion dong (USD 18.95 million) on offer, at a coupon of 3.80%. All these rates represent the highest government bond coupon levels recorded in the year, reflecting rising borrowing costs.
On the corporate side, Vietnamese companies have raised 424.4 trillion dong (USD 16.06 billion) through bond issuances so far this year. Data from the local bond market association shows that 45 trillion dong (USD 1.7 billion) of corporate bonds are due to mature in the remaining months of 2025. Of these, 38.9% are in the real estate sector, while 28.6% are in the banking sector. This indicates that these industries will need to manage refinancing carefully and monitor market conditions to ensure smooth repayment.
Overall, the trends from the government and corporate bond markets suggest a cautious investor environment. While the government continues to fund essential public projects through bond sales, higher coupon rates indicate that attracting buyers may require offering more competitive yields. Corporate sectors, particularly real estate and banking, will face the challenge of refinancing maturing bonds, and market participants are likely to remain selective in their investments in the months ahead.
Source Reuters
5th Jun, 2025
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