Deputy Minister of Finance Tran Xuan Ha is leading an international road show to promote sales of a 1 billion USD Government bond issue.

After meeting with potential investors in Hong Kong on Jan. 18, the road show will move on to London on January 19, then to Boston on Jan.20 and New York on Jan.21.

“Whether the issue will be successful depends much on how well the delegation presents Vietnam’s situation to investors,” National Assembly’s Economic Committee vice chairman Vu Viet Ngoan told Vietnam News.

The bonds have a maturity of 10 years and a yield is capped at 7 percent per year. Citigroup, Barclays Capital and Deutche Bank are advising on the issue.

Capital raised from the bond sale will be lent to PetroVietnam, Vinalines, Song Da Corporation, and Vietnam Machine Erection Corporation (Lilama) to invest in Dung Quat oil refinery projects, hydro-electric power projects and to purchase vessels.

The government approved the issue two years ago but it was delayed several times due to unstable markets and the economic crisis, Ngoan said.

But the crisis has reduced the availability of capital from abroad from previous years, and the nation was being increasingly pressured by the State budget and current account deficits, rising inflation, and recent downgrades in creditworthiness from ratings agencies.

The National Assembly has estimated that the budget deficit would rise to 6.2 percent of GDP in 2010, up from 6 percent last year, although a number of economists were predicting that it would reach 10 percent. Meanwhile, the trade deficit was expected to widen from 12.24 billion USD last year to 14.5 billion USD in 2010.

“These difficulties explain why Vietnam has to borrow money from overseas at this time,” said an official from the Ministry of Finance who declined to be named. Nevertheless, Vu Thanh Tu Anh, director of research at the Fulbright School in HCM City, believed that the bond issue would succeed, noting Vietnam’s advantages compared to other developing countries.

Vietnam first issued bonds overseas in 2005, selling 750 million USD worth, with a 2016 maturity date and 7.125 percent yield./.