Vietnam’s finance ministry is weighing the possibility of returning to international debt markets with a sovereign dollar bond for the first time in over a decade. According to four people familiar with the matter, the ministry is currently in discussions with investment banks about potential terms for the issuance, which would mark a notable development in the country’s approach to foreign financing.
The Southeast Asian nation, which has set an ambitious target of achieving at least 10 per cent annual economic growth through 2030, is exploring a sovereign dollar bond sale to raise capital for infrastructure spending and other development projects. Vietnam has not issued an offshore government bond since 2014, when it raised US$1 billion through a 10-year dollar bond carrying a 4.8 per cent coupon. Prior to that, the country accessed international debt markets in 2010 and 2005.
Investment Banks Have Proposed Multiple Issuance Structures
Two distinct proposals have emerged from the ongoing discussions between the finance ministry and foreign lenders. One foreign investment bank has recommended that Vietnam proceed with a US$1 billion 10-year sovereign dollar bond, according to a banker who attended a meeting with the ministry. A second foreign lender has put forward a slightly different structure, suggesting a 10-year bond with a size ranging between US$500 million and US$1 billion and a coupon of approximately 7 per cent.
No final decision has been reached. Vietnamese officials are carefully evaluating borrowing costs at a time when global yields continue to rise alongside elevated oil prices and persistent inflation. The finance ministry has not committed to moving forward with the sale while these assessments are underway.
Vietnam has maintained a relatively modest public debt burden, estimated at around 37 per cent of gross domestic product last year. Despite this fiscal headroom, the country has historically exercised caution when it comes to overseas borrowing, preferring tight controls over its financial system.
A Sovereign Dollar Bond Could Ease Pressure on Vietnamese Banks
Beyond raising funds for infrastructure, a sovereign dollar bond issuance could carry broader significance for Vietnam’s banking sector. Vietnamese banks have served as the primary source of lending for domestic investment, and credit growth has outpaced deposit growth since at least 2021, according to the central bank. A successful international bond sale could help reduce the strain on these institutions by diversifying the government’s funding sources.
Vietnam has already taken several steps this year to become more open to foreign financing. The State Bank of Vietnam raised the ceiling for private-sector foreign borrowing to US$6.1 billion, up from US$5.5 billion in 2025. The government has also agreed to accept development loans from Japan and Germany, reversing a previous reluctance to draw on billions of dollars in available development financing.
In the domestic market, Vietnam has sold government bonds worth more than US$9 billion so far this year, with an average coupon of 4.2 per cent on 10-year debt. That average coupon has risen from 3.1 per cent during the same period a year earlier, reflecting the broader global trend of climbing yields.
Whether Vietnam ultimately proceeds with a sovereign dollar bond remains uncertain, but the discussions themselves signal a growing willingness to engage with international debt markets as the country pursues its ambitious growth agenda and seeks to broaden its financing options beyond domestic banks.
