Vietnam corporate bond costs rise as maturities loom

The scale of issuance remains substantial. Vietnam had 43 corporate bond deals in September worth 55.4 trillion dong, taking year-to-date issuance to 436.8 trillion dong, according to data compiled by the Vietnam Bond Market Association from Hanoi Stock Exchange and the State Securities Commission. But the refinancing burden is rising at the same time, with 70 trillion dong of bonds due in the remainder of 2026, more than half from real estate issuers and another 21.9% from banks.

Banks are setting the tone for pricing. In September, Techcombank sold 9.5 trillion dong of bonds at 8.6%-9%, HDBank raised 6 trillion dong at 8.7%-9.2%, TPBank tapped the market at 9%-9.7%, LPBank at 9.2%-9.6%, and PVcomBank sold a 10-year bond at 10.5%. Even BIDV, one of the country’s largest lenders, issued long-dated paper at 8%-8.2%. The message is clear: longer tenor now demands materially higher compensation.

That matters because Vietnam’s corporate bond market is meant to channel long-term capital into long-gestation projects, yet pricing is still anchored to bank deposit rates rather than to a deep, independent yield curve. Nguyen Quang Thuan, chairman of FiinGroup and FiinRatings, said many floating-rate bonds are linked to large-bank deposit rates, leaving corporate funding costs directly exposed to shifts in bank pricing. Without a reliable long-term benchmark from government bonds, corporate issuers remain forced to borrow on terms that reflect the banking system, not project economics.

The macro backdrop is not easing the pressure. Vietnam’s economy grew an estimated 9.01% in the first nine months of 2026, with third-quarter GDP up 9.95%, keeping demand for medium- and long-term funding high. The government itself plans to borrow 969.8 trillion dong this year, including 500 trillion dong of bond sales, while its own issuance has averaged 9.03 years at 4.15%, underscoring the gap between sovereign and corporate funding costs.

Credit markets globally are not offering much relief either. US 10-year Treasury yields have remained above 5%, a level that keeps global long-duration funding expensive, while high-yield and investment-grade bond ETFs have shown recent pressure, suggesting investors are still demanding compensation for duration and credit risk. For Vietnam, that external backdrop can feed into local pricing through investor expectations and the cost of offshore capital.

The good news is that the market has healed from the 2022 shock. FiinRatings says the 12-month delinquency rate fell to about 0.24% by August 2026, and new missed payments in the month were around 300 billion dong. But the looming wall of maturities — about 253 trillion dong due over the 12 months to August 2027 — means the next phase will be judged less by headline issuance than by whether issuers can refinance without locking in punishing coupons.

Regulatory tightening is also reshaping the market. Decree 200/2026 and Circular 138/2026 have tightened disclosure, trading and investor-verification rules for private placements, while the government has set a goal of lifting sovereign credit ratings to investment grade by 2030. Those steps should improve transparency and attract institutional money over time, but they do not yet solve the immediate cost problem.

For investors, the trade-off is straightforward. Higher coupons improve carry, especially for banks, which can use subordinated debt to bolster tier-two capital. But for property developers and other leveraged issuers, expensive refinancing can squeeze margins, prolong payback periods and increase default risk if asset sales or cash flow recovery lag. The market can still grow, but growth now depends on whether Vietnam can build a broader investor base and a credible pricing benchmark for long-term debt.