The Ministry of Finance is discussing a potential sovereign U.S. dollar bond with investment banks, according to people familiar with the matter. Proposals under consideration include an issue of between $500 million and $1 billion with a possible 10-year maturity.
A return to international debt markets would represent a significant shift for Vietnam, which has traditionally relied heavily on domestic financing and maintained relatively tight controls over foreign borrowing.
The country's last sovereign dollar bond, issued in 2014, raised $1 billion with a coupon of 4.8%. Current borrowing costs would be materially higher, reflecting changes in global interest rates, inflation and investor risk appetite.
The government is considering the issuance partly to support infrastructure investment and reduce reliance on domestic banks. Vietnamese lenders have experienced rapid credit growth in recent years, with lending expanding faster than deposits.
Vietnam has maintained relatively moderate public debt, estimated at around 37% of GDP, providing the government with some fiscal flexibility compared with heavily indebted economies.
The potential bond issue also reflects broader changes in the country's approach to international capital. Authorities have recently increased limits on foreign borrowing by private companies and accepted development financing from international partners.
The strategy comes as Vietnam seeks to sustain ambitious economic growth targets through the end of the decade. Investment in transport, energy and other infrastructure is viewed as essential to supporting manufacturing and strengthening the country's role in global supply chains.
However, the timing of the potential issuance presents challenges. Global bond yields have risen sharply, with the U.S. 10-year Treasury yield moving above 5%. Higher oil prices are also contributing to inflationary pressures, which could keep borrowing costs elevated.
Vietnamese policymakers will therefore have to balance the benefits of securing long-term foreign financing against the cost of issuing debt in an increasingly expensive global market.
If completed, the transaction would nevertheless represent an important signal of Vietnam's growing integration with international capital markets and its increasing willingness to use foreign financing to support long-term economic development.
