UPDATE 1-Vietnam to sell foreign bonds in 2009/2010 -report

Published: 02 Nov 2009 17:01:29 PST

HANOI, Nov 3 - Vietnam plans to sell international bonds this year or next to raise at least $700 million for the state budget, with the coupon on 10-year bonds capped at 7 percent, a state-run newspaper reported on Tuesday.

A government directive signed on Monday said the finance ministry will set terms and coupons of the bonds and proceeds of $700 million will go to the state budget, the Liberation Saigon daily said without giving the value of the entire issue.

Vietnam is trying hard to boost its foreign exchange reserves and said last month it would borrow $1 billion from the World Bank this year and next, and also $1 billion annually from Japan from 2010 to 2012.

In 2005, Vietnam tapped the international capital market by selling $750 million worth of sovereign bonds maturing in 2016. It approved another issue worth $1 billion in 2007 but never went through with the deal.