On November 2, 2005, in Hanoi, the Finance Ministry has held a press conference to announce the results of issuing the Government bonds to the international capital market. The Vice Minister of Finance Le Thi Bang Tam has chaired the conference.

After a 10-year period of preparation and under the Government guidelines, the Ministry of Finance of Vietnam on 27 October 2005 issued on the Singaporean stock market US$750 million 10-year global notes at a fixed rate of 7.125% per annual. This issuance has a great significance  as it is one of the Vietnam’s targets to integrate into the international financial market in order to diversify the types of mobilizing investment capital for the economic development of the country. Moreover,  the international bond issuance is also a way of commercial borrowing  under capital mobilization strategy of Vietnam, assuring an autonomy in using mobilized capital not depending on the conditions set by the vendors such as export credit borrowing. At the same time, the issuance also has paved the way for the Vietnam’s great businesses to directly mobilize long and medium-term capital in foreign currencies, aiming to meet the demands on economic development investment. Mobilizing capital from international market will reduce a pressure on domestic banking system for foreign currencies, getting an domestically advantageous interest rate  for the projects which are unable to borrow foreign capital, especially for small and medium enterprises.

According to the world economic experts, a number of international investors participating in buying bonds hit a record level on the capital market for many years there (amounting to 255 great investors in comparison with a figure of 150 bond investors of Indonesian Government at the beginning of October of 2005). The investors participating in purchasing Vietnam Government bonds are the great and prestigious investors  on international financial market, of which the financial funds hold 51% of the total issued bonds, the banks: 25%, insurance companies: 17% and the other investors: 7%. Especially, the volumes of bonds have been issued world-wide, including Asia: 38%, Europe:32% and America: 30%.

The total amount of USD750 million will be distributed to Vietnam Shipping Industry Corporation  (Vinashin) to invest in the sector’s production and business development. By developing a strategy to use loan specifically and appropriately, we hope that the Vietnam Shipping Corporation will use the loan effectively to create a premise for the issues in the future more favorably./.

E-MoF