The Vietnam Bank for Social Policies (VBSP) will open an auction for VND2 trillion worth of government bonds, distributed equally for 3-year and 5-year tenors at the Hanoi Stock Exchange (HNX) on July 20.
These bonds will be mature on July 24, 2015 for 3-year and July 24, 2017 for 5-year tenors. Coupons are paid annually on the issuance anniversaries while principle is paid once at maturity.
In the latest auction, Vietnam Bank for Social Policies (VBSP) failed to sell any of VND2 trillion ($95.69 million) worth of government-guaranteed bonds distributed equally for three-year and five-year tenors auctioned on the Hanoi Stock Exchange (HNX) on July 6.
The demand for government bonds is likely to remain weak in the last months of this year because banks are struggling to boost credit growth to support economy in line with the government’s instruction.
The government is targeting 2% credit growth per month in the second half, Deputy Prime Minister Nguyen Xuan Phuc said in June. Meanwhile, the governor Nguyen Van Binh said the credit growth will be just over 10% this year.
In the first sixth months of this year the country’s credit growth rose only 0.76%.
The yield on benchmark five-year bonds rose three basis points, or 0.03 percentage point, to 10.10 percent, that’s the highest level since May 4, Bloomberg data showed.
In the first half of this year, VBSP raised some VND12.68 trillion from government guaranteed bond auctions via the HNX.