Viet Nam plans to issue new State bonds in international markets for debt rescheduling. -- File photo

HA NOI (Biz Hub) ─ Viet Nam plans to issue new State bonds in international capital markets for debt rescheduling, Government officials said at a recent meeting in Ha Noi.

State bonds worth US$1 billion are expected to be issued, according to the local press.

The Ministry of Finance has been asked to coordinate with the Government Office to complete a draft resolution on the issuance of the State bonds before it is submitted to Prime Minister Nguyen Tan Dung for implementation.

If it is carried out, this will be the third international bond issuance and it will swap for the previous issuances.

In 2005, the Government issued $750 million worth of 10-year bonds on the New York Stock Exchange with an annual coupon of 7.125 per cent.

In 2010, it issued $1 billion worth of 10-year bonds on the Singapore Exchange with a coupon of 6.75 per cent per year.

Banking expert Phan Minh Ngoc told online newspaper Infonet that the Government has selected a suitable time for the debt swap, since the global lending interest rates are tending to decline as central banks ease monetary policies to drive economic recovery.

Fitch and Standard & Poor's currently place the credit ratings for Viet Nam at B+ and BB- levels respectively, along with a stable economic outlook.

In late July, Moody's upgraded its rating on Viet Nam's senior unsecured bonds to B1 from B2, citing macroeconomic stability and a strengthening in the balance of payments and external payments position of the country.

According to a national programme for medium-term debt management, Viet Nam needs foreign debts worth about VND33 trillion ($1.57 billion) in 2014 and VND40 trillion ($1.90 billion) in 2015 to compensate for overspending by the State budget. ─ VNS