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Risk Structure of Interest Rates of Bond Issued in Vietnam

The document discusses risk structure of interest rates for bonds issued in Vietnam. It provides details on corporate bond markets and government bond markets in Vietnam in the third quarter of 2021, including key industry sectors and interest rate ranges. Government bonds saw an average issuance term of 13.21 years and an average interest rate of 2.26%, the lowest ever.

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29 views2 pages

Risk Structure of Interest Rates of Bond Issued in Vietnam

The document discusses risk structure of interest rates for bonds issued in Vietnam. It provides details on corporate bond markets and government bond markets in Vietnam in the third quarter of 2021, including key industry sectors and interest rate ranges. Government bonds saw an average issuance term of 13.21 years and an average interest rate of 2.26%, the lowest ever.

Uploaded by

Thảo Đỗ
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Risk structure of interest rates of bond issued in Vietnam

Interest rate risk of bond is the risk that interest rates will change significantly from what
investors expect. If interest rates drop significantly, investors face the possibility of paying
upfront. If interest rates rise, the investor will be stuck with an instrument that yields less than
the market rate. The more time to maturity, the greater the interest rate risk an investor is
exposed to because the more difficult it is to predict future market developments.
Corporate bond market Vietnam in the third quarter of 2021:
In the third quarter, Real Estate was the industry that accounted for the largest proportion,
accounting for 46.8% of the total issuance value, equivalent to VND 52,287 billion (up 60.2%
compared to the previous quarter). Interest rates on real estate corporate bonds are quite high
compared to deposit rates in the range of 7.4% - 13%/year.
Finance - Banking is the second largest sector with 40.7% of total issuance value in the quarter,
equivalent to VND 45,507 billion (down 34% compared to the previous quarter). Interest rates
on corporate bonds of banks are still low, ranging from 4% to 7.8%/year. Meanwhile, interest
rates of financial institutions are higher, ranging from 4% to 12.5%/year.
Vietnam's bond market group, Multi-sector groups accounted for 1.0% of the total issuance value
in the third quarter, equivalent to VND 1,150 billion (up 19.2 times compared to the previous
quarter).
Other industries accounted for 11.5% of total issuance value in the quarter, equivalent to VND
12,801 billion (down 63% qoq).
Accumulated from the beginning of the year, the total value of corporate bonds issued reached
VND 301,139 billion, down 3.3% over the same period; of which was 277,647 billion dongs
issued privately (-3.9% in comparison with the same period last year) and 23,492 billion dongs
issued to the public (+3.7% in comparison with the same period last year). In which, Finance -
Banking is the leading industry group in terms of issuance value, accounting for 40% of total
issuance value. Real estate and multi-industry groups accounted for 34% and 7% of the total
issuance value, respectively. Other industry groups accounted for 19% of the total issuance
value.
Government bond market Vietnam in the third quarter of 2021:
In the first nine months of 2021, the average issuance term of government bonds reached 13.21
years, an increase of 0.08 compared to the same period in 2020. The average issuance interest
rate reached 2.26%/year - the lowest since So far, saving capital mobilization costs for the
budget, increasing the sustainability of the bond debt portfolio.
Accordingly, 89.45% of the volume of issuance of government bonds with a term of 10 years or
more, the average issuance term remained at a high level, reaching 13.21 years (an increase of
0.08 years compared to the same period last year) the period in 2020, an increase of 4.5 years
compared to 2016).
Meanwhile, the average issuance interest rate is the lowest ever (2.26%/year), 0.09% - 0.4%/year
lower than the end of 2020 (4.3 %/year lower than the end of 2016).
That is to help save the cost of raising capital for the state budget, contributing to increasing the
sustainability of the government bond debt portfolio. Currently, the interest rate of 10-year
government bonds is 2.12%/year, 15-year term is 2.35%/year.

https://www.vndirect.com.vn/cmsupload/beta/BCTP_3Q21_20211014.pdf
https://tuoitre.vn/quy-mo-thi-truong-trai-phieu-viet-nam-len-toi-83-6-ti-usd-
2021112614300467.htm
https://thoibaotaichinhvietnam.vn/trai-phieu-chinh-phu-ky-han-keo-dai-lai-suat-thap-nhat-lich-
su-94051.html

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