Vietnam targets Q4 to issue $1 bln offshore bond

Vietnam is aiming to issue a US$1 billion bond in international markets in the fourth quarter of 2007, but its foreign debt will remain at a "safe level", a finance ministry official was quoted Monday as saying.
Last month, the government approved a 2007 sovereign bond issue to raise $1 billion to held fund the construction of Vietnam's first oil refinery, power plants and a cargo ship.
"The projects listed by the government as loan recipients are urgent... so right within this year the government will proceed with the issue on international markets," Nguyen Thi Hong Yen, a deputy manager at the ministry, told the state-run Vietnam Economic Times newspaper.
She said the debt would be issued in the last quarter of 2007 and the government will sell the bond and re-lend the proceeds to Vietnamese companies.
"The national foreign debt rate is only 31 percent of GDP and if more debt comes, the rate will still stay at a safe level and below 50 percent," Yen said.
The World Bank forecast Vietnam's 2007 foreign debt would ease to 32.1 percent of gross domestic product, or $21.8 billion, from 32.6 percent last year and 32.5 percent in 2005.
Vietnam raised $750 million in its maiden international bond in October 2005. It increased the size of the issue from an initial $500 million after generating an order book for $4.5 billion.
The January 2016 bond was sold to yield 7.125 percent. Credit Suisse First Boston was the sole bookrunner.
Yen said market conditions would benefit the debt issue.
"The yield could not be defined immediately but it will be better than the first issue," Yen said.
In March, Moody's upgraded its rating outlook for Vietnam's Ba3 foreign-currency bonds to positive from stable and Fitch Ratings assigned BB- for Vietnam's long-term foreign currency Issuer Default with a stable outlook.
Source: Reuters