This first bond issuance of Vietnamese Government to the international capital market was significant for the international economic integration and the industrialization and modernization of our country. The preparation for this first bond issuance was initiated by the Government before 1995, amid the urgent need to raise capital for the national development. But it was not until 2000 when Vietnam’s position was enhanced in the international arena with the decrease in the external debt ratio, and the increase in the national credit rating, market’s attention to Vietnam, and favorable conditions in international credit market, the Government decided to take action for promoting Vietnam’s integration into the international financial market to diversify forms of capital mobilization for economic development.

The preparation for the issuance was carried out very carefully, such as selecting underwriting banks that were reputable global financial groups with seasoned experience in issuing international bonds, led by Credit Suisse First Boston (CSFB) as the main underwriting bank; completing necessary legal documents, of which the Prospectus was the most important document, giving overall landscape of the economic, political and social situation of Vietnam up to 2005, verified by domestic and international legal consultants required to the issuer. This document was directly presented to individuals, organizations, and global investors, posted on Bloomberg - the global financial information network. These documents were evaluated by investors globally as the most complete, transparent and systematic presentation on the socio-economic development situation of Vietnam in the past 5 years.

For nearly 10 days (20 October - 28 October 2005), the Government of Vietnam’s roadshow delegation, led by Deputy Minister of Finance Le Thi Bang Tam, participated by representatives from the Ministry of Planning and Investment, State Bank of Vietnam, Ministry of Justice, Vietnam Shipbuilding Industry Corporation (Vinashin) and JSC Bank for Investment and Development of Vietnam, JSC Bank for Foreign Trade of Vietnam, Cement Corporation who participated  to learn experience, visited various international financial centers including Hong Kong, Singapore, London, New York and Boston to meet with investors to present about Vietnam economy, answered their questions to strengthen their confidence before deciding to buy bonds issued by the Government of Vietnam.

The delegation’s work plan was full from early morning to late afternoon. During breakfasts, the delegation and CSFB experts discussed and agreed on daily work plan, assigned teams working with investors, discussed contents to be agreed upon. Sometimes, they even had breakfast while working directly or via conference call with investors. Breakfasts were followed by individual meetings with major investors in different markets. Every morning and afternoon, the delegation visited and worked directly with 3-4 investors at their offices, each meeting lasted about 30 minutes. Investors had studied the Prospectus in advance, so they just focused on issues that needed further clarification. Investors were very interested in the innovation directions as well as the policies of Vietnamese Government regarding international integration, financial and monetary policies, national debt management, measures of exchange rate stabilization, anti-inflation, banking system restructuring, measures to reform state-owned enterprises, policies towards foreign investors in various fields, especially banking and finance sector. They were also interested in Vinashin’s plan to use capital raised from bond issuance, and potential and ability to develop the shipbuilding industry in Vietnam.

Luncheons were held at famous hotels to simultaneously organize seminars with investors whom the delegation could not visit directly. Due to the national significance, the seminars were attended by the Ambassador Extraordinary and Plenipotentiary of Vietnam to the host countries. During the seminars, information about Vietnam as a bond issuer was conveyed to investors through a documentary film about Vietnam, and a presentation of Vietnam’s economic overview delivered by the Deputy Minister of Finance Le Thi Bang Tam. The seminars were attended by a large number of investors who wanted to learn about emerging markets with great potential in Asia like Vietnam.

From 6:00 p.m. daily, after the official meetings, internal teleconferences were held among the delegation and CSFB experts to update subscription results, classify investors, identify interests of investors in different markets as well as countermeasures therefor, issues that needed collaboration, consultation or report to the Government. As a result, number of investors and subscriptions increased daily, right after the first day of promotion in Hong Kong, the number of subscriptions reached USD1 billion, twice the number of bonds intended for initial issuance. With such favorable conditions, the delegation discussed and agreed to propose the Government to increase the issuance volume to USD750 million. After the Government decided to increase the issuance volume to USD750 million with tentative interest rate of 7.25%/year, the bond subscription amount increased to USD3 billion. As of the bond valuation date (27 October 2005), the subscription amount reached USD4.5 billion, 6 times higher than the total intended issuance. More than 255 investors had subscribed to buy bonds - a record high in the capital market in recent years - including many large and reputable investors in the financial markets of Asia, Europe and the U.S. Many investors “subscribed” in large quantities, especially some central banks and investment institutions of Asian governments, who “subscribed” USD 50-100 million.  

Despite the intense, lengthy, and long-running work plan, not to mention cold and rainy weather in London and New York in late autumn and unfamiliar dishes, all members of the delegation were excited when the results were beyond our expectations, opening up a new potential method of raising capital for investment and development of the country. Thus, no one felt tired during the business trip. People almost forgot themselves and their personal business. Everything was about Government bonds, during their meals, their breaks, and even in the bedroom. The excitement also spread to the drivers responsible for the delegation’s traveling during the business trip. They became more open and friendly, and were curious to learn about the country and the people of Vietnam, a country they heard a lot about, but still remained a hidden secret for many people in Europe and America.

After analyzing the subscription results, based on the principle of selecting high-quality long-term investors with a large proportion of financial investment funds, evenly distributed in Asia, Europe and America, at 9:35 am (21:35 Vietnam time) on 27 October 2005 in New York, the first issuance of Vietnamese government bonds to the international capital market with a total volume of USD750 million, 10-year tenor was successfully completed with the official valuation, and the bonds began to be traded on the secondary market. This was a historic moment marking a positive step towards achieving our goal of integration into the international financial market, an unforgettable moment for all delegation members, all Vietnamese joining this event. When Ms. Le Thi Bang Tam, the delegation head, pressed the button to trade Vietnamese government bonds on the secondary market at CSFB Trading Floor in New York, more than two hundred people present at the Floor congratulated the event with endless applause, congratulating a new type of bond traded on the international bond market, congratulating a country that suffered a lot from the war successfully implemented the reform. In that moment, all members of the delegation were in tears, feeling proud of the country, of the Vietnamese people, and confident in the bright future of our homeland.

The initial issuance of Vietnamese Government bonds to the international capital market was highly appreciated by the international media and financial sector, paving the way for the subsequent issuances, opening opportunities for businesses to access international capital to implement their development and integration strategies. In the future, BIDV - with the goal of becoming a major bank providing domestic and foreign financial services - will participate in the international capital market directly and indirectly to increase the bank’s capital as well as provide financial services, consulting services and capital support for domestic enterprises. And I believe, the experience of joining the first issuance of the Government bonds to international market will be a useful experience for us.