HANOI, May 21 (Reuters) – State-run Vietnam Bank for Social Policies failed to sell any of the government-backed bonds it offered this week because bidders sought yields above the rate the debt issuer was prepared to accept, the Hanoi stock market said.
Four bidders at the auction on Thursday bid for a total 500 billion dong ($ 28 million) of two-year bonds at yields of between 8.7 percent and 10 percent but the bank would accept no higher than 8.4 percent, the exchange said in a statement.
This is the fourth time the Hanoi-based lender, one of Vietnam’s two policy lending banks, has failed to sell bonds.
It had hoped to raise 2 trillion dong to finance lending to the poor as part of the government’s poverty reduction drive.
At the last auction of government-backed bonds on April 13, the bank failed to sell any of its 2 trillion dong of two-year debt because bid yields of 8.8-9.5 percent were above the ceiling rate of 7.9 percent it was prepared to accept.
Vietnam’s State Treasury has also failed to raise much money through bond issues this year, sparking concerns about how Hanoi will fund a budget gap that could widen to 10 percent of gross domestic product.