Vietnam’s Five-Year Bond Yield at August High on Supply Pressure

Vietnamese sovereign bonds fell, pushing the five-year yield to a four-month high, on signs the government will have to offer higher rates to meet its 2014 sale target.

The yield on the notes due 2019 jumped 31 basis points to 6.5 percent, the highest level since Aug. 18, according to a daily fixing from lenders compiled by Bloomberg. The yield has advanced 65 basis points, or 0.65 percentage point, this month. The three-year yield rose 21 basis points to 5.62 percent.

Vietnam Development Bank sold three- and five-year bonds yesterday at yields of 6.2 percent and 7 percent, respectively, according to a statement on the Hanoi Stock Exchange website. That compared with 5.6 percent and 6.45 percent at its last sale on Dec. 10. The State Treasury, which is offering 5 trillion dong of debt today, increased its 2014 issuance goal by 30 trillion dong to 262 trillion dong last month. The government said Dec. 2 it had sold 228.8 trillion dong this year.

“Yields at today’s State Treasury debt sale are expected to increase,” said Nguyen Minh Duc, a Hanoi-based fixed-income manager at Ho Chi Minh City Securities Corp. “The State Treasury is also under pressure to meet its full-year bond sales target.”

The dong was steady at 21,388 per dollar as of 4:12 p.m. in Hanoi, data compiled by Bloomberg show. The central bank set the currency’s reference rate at 21,246 today, where it’s been since June 19, according to its website. The dong is allowed to trade as much as 1 percent on either side of the fixing.

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