Market Summary

Size and Composition

Viet Nam’s local currency bond market grew 9.8% quarter-on-quarter (q-o-q) to reach VND2,089.1 trillion (USD91.5 billion) at the end of December. The growth was driven by both government and corporate bonds, with outstanding bonds in these segments increasing 5.3% q-o-q and 22.7% q-o-q, respectively, which in both cases was a faster growth rate than in the previous quarter. Outstanding government bonds and corporate bonds comprised 71.3% and 28.7% of the bond market, respectively, at the end of December 2021.

Notable Corporate Bond Issuance

Corporate bond issuance in Viet Nam jumped 30.8% q-o-q in the fourth quarter of 2021 to VND123.4 trillion as more firms turned to the bond market to raise funds. The largest debt issuers during the quarter were mainly from the property sector, led by Thai Son-Long An JSC with a single VND4.6 trillion issuance. 

Policy and Regulatory Developments

In November, the State Bank of Viet Nam issued Circular No. 16/2021/TT-NHNN on regulating the purchase and sale of corporate bonds by credit institutions and foreign bank branches. Corporate bonds must satisfy the following conditions before a transaction can proceed: (i) issued in accordance with the law, (ii) denominated in Vietnamese dong; and (iii) under the legal ownership of the seller and not yet mature for principal and interest payment. The seller must also confirm that corporate bonds are not in dispute; are permitted for transactions under law; and are not in a state of being traded with a term, discounted, or rediscounted. Corporate bond issuance in the following cases is prohibited: (i) to restructure debts of the bond-issuing enterprise, (ii) to contribute capital or purchase shares at another enterprise, and (iii) to raise working capital. A credit institution may purchase corporate bonds only when its nonperforming loan ratio is under 3%.