VIETNAM BOND MARKET REPORT AUG 2025: GOVERNMENT BONDS LANGUISH; CORPORATE BONDS STAGE A COMEBACK
August auction allotment reached VND 11.465 tn, the lowest YTD and a steep drop versus July. 8M cumulative issuance: VND 238.714 tn (47.7% of the annual plan); 3Q through end-Aug: VND 37.3 tn (31.1% of the quarterly plan), confirming a clear slowdown in supply. The bid-to-offer ratio fell to 48.5% and the award rate to 24.1% (both YTD lows), sliding week after week since early August. Softer primary demand suggests VGBs are less competitive at current yields as they compete with accelerating private-sector lending into year-end.The State Treasury plans to call VND 81 tn in September, a large single-month target but the award ratio is unlikely to improve materially near term.
Turnover re-accelerated in August to VND 389 tn (outright 76.3% - VND 297 tn; repo - VND 92 tn). Average daily value rose to VND 14 tn (+37.8% MoM), consistent with active portfolio rebalancing as yields trend higher.
The market rebounded strongly in August with VND 47.713 tn issued (+47% MoM, −8.2% YoY) across 47 tranches; 8M cumulative: VND 318.041 tn (+39.8% YoY). Banks remained the anchor, printing at 5.3–5.9% p.a. for 2–3Y tenors; notable prints: OCB VND 4.8 tn and BAB VND 3.2 tn. In real estate, VHM stood out with VND 15 tn, 3.5-year tenor, 11% coupon.
Early redemptions, maturities, and risk. Buybacks recovered to VND 39.782 tn (+150.3% YoY), largely from banks (notably Aug-2024 vintages) to manage duration and costs, leveraging lower funding rates to pave the way for new, lower-coupon issuance. The maturity wall eased after a YTD peak in August (VND 36 tn): September maturities are VND 17 tn. Property credit risk remains elevated: 10 developers disclosed delays in principal/coupon payments in August; notably, Hano-Vid extended 110 tranches worth >VND 5.2 tn to 2027.
Activity cooled versus July’s high (VND 132.028 tn; VND 5.74 tn/day), with August turnover at VND 109.288 tn (−17.2% MoM).
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