Lumen Vietnam Fund

Blog

Vietnam corporate bond market slows as interest rates rise

Vietnam corporate bond market slows as interest rates rise

Vietnam’s corporate bond market slowed in the third quarter of 2026, with issuance value falling 26% from the previous quarter, while issuance yields continued to rise across all sectors.

Bond issuance slows

According to a recent report by S&I Ratings, Vietnam’s corporate bond market recorded 153 successful issuances in the third quarter, with a total value of VND179.4 trillion ($6.93 billion), down 26% from the second quarter.

The trend mirrored 2025, when issuance surged in Q2 following a sluggish start to the year before correcting in Q3.

Year-on-year, issuance value in Q3 rose 7.8%, while the cumulative increase for the first nine months reached 6.7%.

Notably, public bond offerings performed strongly, with 16 successful issuances in Q3 worth a combined VND31.6 trillion ($1.22 billion), up 55% year-on-year and the highest level on record.

Commercial banks continued to dominate this channel, accounting for eight of the 16 offerings. Individual issuances were mostly valued at VND1 trillion to VND3 trillion ($115.93 million), while Agribank alone successfully issued VND15 trillion.

In the first nine months, total corporate bond issuance reached VND464.1 trillion ($17.93 billion). During the same period, bonds worth VND132.8 trillion ($5.13 billion) matured, up 5.7%, while early bond buybacks totalled VND228.6 trillion, down 4.5%. Net issuance value was reported at VND102.6 trillion ($8.83 billion).

As of the end of September 2026, outstanding corporate bonds totalled approximately VND1,540 trillion ($59.51 billion), up 7.1% from the end of 2025.

According to S&I Ratings, real estate bond issuance corrected in Q3 after surging in Q2. The number of successful issuances fell from 43 to 21, while total issuance value dropped 55% quarter-on-quarter.

The decline was mainly driven by changes in fundraising activity among major corporate groups. Issuance by the Vingroup group fell to VND16 trillion ($618.3 million) in Q3 from VND61 trillion in the previous quarter. Meanwhile, the Masterise group maintained issuance at VND23.5 trillion ($908.14 million) in Q3.

The ratings agency said the two corporations typically account for as much as 80% of total issuance by the real estate sector, giving their fundraising activity a significant influence on the industry's overall performance.

Despite the sharp quarterly decline, real estate bond issuance in Q3 was still up 27% from a year earlier. For the first nine months as a whole, issuance increased 121% year-on-year.

S&I Ratings noted the real estate market was facing difficulties amid rising interest rates, which were affecting project implementation schedules and companies' financing costs. However, substantial funding requirements for project development would remain a key driver of real estate firms' bond fundraising in the coming period.

In the banking sector, total bond issuance reached VND120 trillion ($4.64 million) in Q3, up 11.8% year-on-year and 7% from Q2. However, cumulative issuance in the first nine months remained 20% below the same period in 2025.

With banks accounting for around two-thirds of total corporate bond issuance, the sector's decline was also a key factor behind the market's slower growth.

Issuance rates approach 2022-2023 peaks

Corporate bond issuance rates continued to rise across all sectors in Q3/2026. Coupon rates had increased by an average of around 250 basis points from their 2025 lows. However, the pace of increase slowed considerably in Q3 as rates approached the peaks recorded in 2022-2023.

For banks, the average issuance rate reached 8.85% per year in Q3, exceeding the 2022 average of 8.7%. However, it remained below the previous peak of 9.7%.

Bank bond coupon rates in Q3 generally ranged from 8% to 9.7% per year. Some issuances carried rates of 10% or higher, including Sacombank bonds with a fixed coupon of 10% and PVcomBank bonds paying a rate linked to the average 12-month savings deposit rate for individual customers plus a margin of 4.6 percentage points, equivalent to around 10.4% at the time of the report.

Meanwhile, issuance rates for real estate companies and firms in other sectors also rose sharply, reaching around 12.5-13% per year. Even so, these rates remained below the peak range of 14-14.5% recorded in 2022-2023.

The trend highlights continued increases in bond fundraising costs as interest rates approach levels last seen during the previous high-rate period.

Maturity pressures to rise in late 2026 and 2027

Maturity pressures in Vietnam's corporate bond market are expected to increase significantly in Q4/2026. S&I Ratings estimates that bonds worth around VND93 trillion ($3.59 billion) will fall due for repayment during the quarter, the highest amount for any quarter this year. Real estate companies account for approximately VND46.9 trillion ($1.81 billion), or nearly half of the market's total maturities.

The pressure is expected to intensify further in 2027. Total corporate bonds maturing next year could reach around VND276 trillion ($10.67 billion), up 22% from 2026. Real estate companies alone are expected to face approximately VND156 trillion ($6.03 billion) in maturities, accounting for 57% of the market total.

Against this backdrop, new bond issuance will serve not only to finance projects but also to play an important role in restructuring existing debt.

Beyond refinancing pressures, the economy's medium- and long-term funding needs are entering a period of strong growth to support real estate developments, urban areas, transport infrastructure, energy and industrial projects. Corporate bonds are therefore expected to remain an important funding channel, providing additional medium- and long-term capital to the economy.

However, the market's ability to absorb new issuance could be affected by domestic and international interest rate movements. Persistent inflation risks, coupled with international government bond yields remaining elevated, could keep interest rates high at least through the first half of 2027.

For bond issuers, this would mean higher financing costs, particularly for companies with high leverage or substantial funding needs.

S&I Ratings said the medium-term outlook for Vietnam's corporate bond market remained positive, supported by strong corporate funding demand and mounting refinancing pressures.

Nevertheless, with interest rates still high, the market would need more time to continue restructuring on a sustainable basis, attract a broader range of investors, and strengthen its role as a key source of medium- and long-term financing for the economy.


Source: Kha Moc, Thai Ha

Latest Posts

Vietnam’s rapid growth reshapes Southeast Asia’s economic rankings: The Nation

Vietnam’s rapid growth reshapes Southeast Asia’s economic rankings: The Nation

Vietnam’s rapid economic growth is reshaping its position in Southeast Asia, with the country projected to overtake Indonesia in nominal GDP per capita in 2026, according to Thailand’s The Nation.

Vietnam’s nominal GDP per capita is forecast to reach US$5,259 in 2026, compared with US$5,153 for Indonesia, potentially placing it fifth among ASEAN economies, the Thai newspaper reported on October 31, citing International Monetary Fund (IMF) projections.

The outlook reflects Vietnam’s expanding manufacturing base, strong export performance and continued foreign investment. The Government has set a target of at least 10% economic growth in 2026, while real GDP grew 9.95% year on year in the third quarter.

Public investment and foreign direct investment (FDI) remain important drivers of the country’s economic expansion. In the first nine months of 2026, disbursed FDI reached US$21.1 billion, up 12% year on year, while registered capital for newly licensed projects rose 76% to US$50.3 billion.

Exports also recorded strong growth, increasing 25% to US$434 billion over the same period, according to figures cited by The Nation. International manufacturers, including Samsung Electronics and Foxconn, have continued to expand their production operations in Vietnam, reinforcing its role in global supply chains.

Mai Fujita, a senior researcher at the Institute of Developing Economies of the Japan External Trade Organization (IDE-JETRO), emphasised the importance of proactive public investment in supporting economic growth. She also highlighted the need to develop human resources and technological capabilities alongside infrastructure to sustain growth over the longer term.

Vietnam is now setting its sights on raising GDP per capita to US$8,500 by 2030, a level comparable to Thailand’s current figure.

Its projected rise in GDP per capita comes as Indonesia continues to expand at a more moderate pace, while Thailand faces slower growth and high household debt. However, nominal GDP per capita rankings are influenced by exchange rates and population size as well as economic performance, and do not in themselves reflect income distribution or living standards.

International forecasts also point to challenges ahead. The International Monetary Fund and the Asian Development Bank project Vietnam’s economy to grow by around 7.5% in 2027, below the Government’s ambition of at least 10% growth in 2026.

The longer-term challenge is therefore to translate rapid expansion into sustained productivity gains and higher incomes. Investment in skills, technology and infrastructure will be crucial to strengthening competitiveness and ensuring that Vietnam’s economic momentum can be maintained.


Vietnam manufacturing growth eases in October as export orders fall

Vietnam manufacturing growth eases in October as export orders fall

The Vietnamese manufacturing sector continued expansion in October, although price increases and supply issues limited growth in some cases.

The S&P Global Vietnam Manufacturing Purchasing Managers' Index ticked up to 52.3 points in October from 51.9 points in September, pointing to a further modest monthly strengthening in the health of the sector at the start of the fourth quarter. Business conditions have now improved in 16 consecutive months.

The overall improvement in operating conditions was limited by slower rises in output and new orders. Total new business rose for the sixth month running, despite falling new export orders weighing on growth. The rate of expansion was solid, but the slowest in the current growth sequence.

Manufacturing production expanded again in October as new orders increased on stronger customer demand. However, growth also eased here, hitting a six-month low. Some respondents said difficulties obtaining raw materials had limited production growth.

Transportation difficulties were evident in data on suppliers' delivery times, which lengthened markedly and to the largest extent since April. Rising fuel prices and poor weather conditions were among the factors leading to transportation delays, according to respondents.

Difficulties importing goods and the use of inputs to support production meant that stocks of purchases decreased solidly, despite sustained growth of input buying as companies made efforts to secure goods to support production.

Rising transportation costs were also central to the latest rise in input prices as higher costs for oil pushed up fuel prices. The rate of inflation quickened for the second month running and was the fastest since June, albeit still well below the spike seen following the outbreak of war in the Middle East. In turn, output prices also increased at a sharper pace, following only a slight rise in September.

Employment fell for the third consecutive month in October, though only slightly, with some firms citing staff resignations. Despite the smaller workforce, slower new order growth and more efficient processing of outstanding work allowed firms to reduce backlogs modestly.

Stocks of finished goods also fell as firms sold warehoused goods to draw down inventories. Post-production stocks decreased markedly, though slightly less than in September.

Optimism about better raw material availability and further improvements in market conditions supported a positive 12-month outlook for production. Sentiment hit an eight-month high but remained weaker than before the war in the Middle East.

Andrew Harker, economics director at S&P Global Market Intelligence said, "Vietnamese firms are battling to maintain growth at present amid headwinds that are making their operations more challenging. New orders continued to rise in October, feeding through to a solid increase in production, but in both cases rates of expansion slowed from September."

"The limits to growth were often due to the international environment. Fuel and transportation costs rose amid higher oil prices, while companies reported difficulties importing and exporting products. While firms are able to maintain improvements for now, they will be hoping for a more conducive environment to growth in the months ahead," he added.


Hanoi issues guidelines on green, circular projects and ESG implementation

Hanoi issues guidelines on green, circular projects and ESG implementation

Hanoi has directed municipal departments to implement government guidelines for classifying green projects, circular economy initiatives, and Environmental, Social, and Governance (ESG) frameworks, paving the way for eligible businesses to access interest rate subsidies.

Mr. Bui Duy Cuong, Vice Chairman of the Hanoi People’s Committee, signed Official Dispatch No. 6035/UBND-NNMT regarding the implementation of Prime Minister Decision No. 46/2026/QD-TTg dated September 17, 2026 (Decision 46).

The decision provides technical guidelines for classifying green projects, evaluating circular economy criteria, and applying ESG criteria.

Under Decision 46, enterprises, business households, and individual business entities executing certified green or circular projects and presenting ESG implementation reports will qualify for interest rate support considerations under applicable regulations.

Under the city’s directive, the Hanoi Department of Agriculture and Environment will serve as the focal agency, collaborating with relevant departments, sectors, and commune-level People's Committees to disseminate the decision.

The department is tasked with guiding the implementation of environmental and agricultural criteria for green and circular projects under its state management scope.

The department must compile the list of projects under the scope of Decision 46 to report to the Ministry of Agriculture and Environment. It will advise the municipal People's Committee on publishing the certified list of green, circular, and ESG-compliant projects biannually on the city's portal on June 30 and December 31.

Additionally, the department will inspect, monitor, and address violations regarding independent evaluation entities operating in agriculture and environment sectors, while supervising project compliance maintenance over time.

Concurrently, the Hanoi Department of Finance is assigned to lead data integration for investment management systems and oversee the implementation of governance frameworks. It will assess financial resources and state budget capabilities according to decentralized authority, alongside mobilizing alternative financial mechanisms to support green and circular programs.

The Department of Finance will also inspect and monitor independent rating agencies and ensure project compliance according to legal auditing and administrative violation frameworks.

The Hanoi Department of Industry and Trade will oversee project implementation across energy, processing, and manufacturing sectors. The department is tasked with promoting resource-efficient, low-emission, and sustainable production models, while evaluating criteria for industrial symbiosis and circular linkages.

The Hanoi Department of Construction will handle projects in construction, urban development, technical infrastructure, and transport, promoting resource-saving materials, low-carbon building technologies, and sustainable urban solutions.

Under Decision 46, a green project must meet specific eligibility requirements across designated sectors. Attached technical appendixes outline requirements for ten energy project categories, three transport categories, two construction categories, three water resource categories, 12 agriculture, forestry, fisheries, and biodiversity categories, six processing and manufacturing categories, and nine environmental service categories.

For circular economy projects, the regulations define eight project groups for circular design and manufacturing, two for circular utilization, five for resource recovery, and four for industrial symbiosis and circular integration.


See all blog