Vietnam Assets Management Company (VAMC) plans to issue 35 trillion VND (1.67 billion USD) worth of bonds to buy bad debts from credit institutions this year, said the company's vice chairman, Le Quoc Hung.

The company will soon submit its plan to the State Bank of Vietnam (SBV) for approval.

A group of VAMC staff will work with several joint stock banks in the country's southern region this week. The banks are expected to be the VAMC's first customers this year, according to Hung.

A VAMC bond will be equivalent to a contract buying and selling the debt. In cases where the bad debt is a syndicated loan, VAMC will issue a bond for every credit institution taking part in the loan. The value of bonds will be equivalent to the bad debt's buying price at book value.

With the refinancing rate to credit institutions as much as 70 percent of the price of bonds issued by VAMC during the bad debt resolution process and an annual provision of 20 percent for the bonds made by the credit institutions, VAMC is expected to attract and encourage many banks to sell their bad debt.

The bonds can be deposited at SBV free of charge.-VNA