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By Ho Binh Minh
HANOI, Oct 30 (Reuters) - Vietnam plans to raise $1 billionfrom its first global sovereign bond in more than four years,and has hired three foreign banks to help tap internationalinvestors.
Meetings are scheduled with potential investors inSingapore, Hong Kong, London and three cities in the UnitedStates, the official Thanh Nien (Young People) newspaper said.
Vietnam's Finance Ministry has hired Deutsche Bank, HSBC and Standard Chartered Bank for the global bond investor roadshows, it said in a statementissued earlier this month without giving the size of the issue.
Officials at the ministry could not immediately be reachedfor comment.
The Vietnamese government has approved a plan to sell a newsovereign bond to swap for debt issued in 2005 and 2010.
The Southeast Asian country requires intensive funding toaccommodate economic growth, slated to accelerate to 5.8 percentthis year and 6.2 percent in 2015.
The country is rated B1 by Moody's and BB- by Standard &Poor's, and both ratings have a stable outlook.
Investor meetings began on Wednesday. A 144A/Reg S formatbond issue could follow.
"Vietnam is quite a rare issuer so I think there will beinterest because of the scarcity value. The economy hasstabilised significantly in many aspects, said Rajeev De Mello,a Schroders fund manager based in Singapore.
"There is appetite for spreads and the yield hunt is stillon, so a 10-year bond will not put investors off. Beyond that itwill depend on the insurance companies and pension funds - itwill be related to a specific type of demand. The 5-10 year partof the curve is easier for them to price. But they may betempted to longer maturity to lock in very low yields."
In 2010, the government picked Barclays Capital, Citigroupand Deutsche Bank as joint lead managers for the issuance of a$1 billion 10-year sovereign bond. In 2005,Vietnam sold $750 million worth of sovereign bonds maturing in 2016.
The debt due in 2020 is now yielding around 4 percent,compared with the bonds due in 2016, which yield around 2percent.
Vietnam's public debt has been rising, with 98 percent beingused for development, Finance Minister Dinh Tien Dung was quotedin a government statement as saying on Wednesday.
Public debt would rise to 60.3 percent of Vietnam's grossdomestic product (GDP) by the end of 2014, from 54.2 percentlast year, according to a government report delivered by PrimeMinister Nguyen Tan Dung to the National Assembly on Oct. 20.
Foreign debt is forecast to rise to 39.9 percent of GDP bythe end of 2014, up from 37.3 percent last year, and would peakat 64.9 percent in 2016 before decreasing to 60.2 percent in2020, based on government reports. (Additional reporting by Umesh Desai in HONG KONG; Editing byKim Coghill)
