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Vietnamese govt. bonds fail to find “buyers”

Posted on: June 19, 2009


Reuters – Friday, June 19

HANOI, June 18 – Vietnam’s State Treasury failed to sell any of the 1 trillion dong of bonds offered at an auction on Thursday as bidders once again sought yields well above the ceiling, the Hanoi stock market said.

Four bidders sought yields of 9.5 percent for 500 billion dong of three-year bonds, compared with the ceiling of 9 percent, the exchange said in a statement.

Two bidders also placed bids for yields of 9.1 percent to 10 percent for 300 billion dong of five-year bonds on offer, compared with the ceiling rate of 9.1 percent. The exchange did not say why the 9.1 percent bid was rejected.

The State Treasury has had a dismal record at auctions since February because bids have consistently exceeded its yield ceilings, raising concern about how the government will fund a budget gap that could widen to a tenth of gross domestic product or more. [ID:nHAN162653]

In a separate statement the exchange said it would auction government-backed bonds for state-run Vietnam Expressway Corporation on June 23 to raise 500 billion dong.

Proceeds from the three-year and five-year debt would go towards the construction of a highway linking Hanoi and the northern province of Lao Cai bordering China.

On Wednesday, the state-run highway builder tried to auction 500 billion dong in corporate bonds but failed to sell any because bidders sought yields above the rates it was willing to accept. [ID:nHAN35374] The same happened in late May.

Fixings for three-year government bond yields rose to 8.8268 percent on Thursday from 8.8050 percent on Wednesday, and yields on five-year debt edged up to 8.9804 percent from 8.9175 percent the previous day, according to Reuters data <VNBMKFIXINGS02>.

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