Vietnam’s Bond Market: A Decade of Growth and Rising Risks

2015-2025: Rapid but Uneven Expansion

Over the past ten years, the Vietnam bond market has changed from a relatively narrow funding channel into a core pillar of capital mobilization for both the State and the corporate sector. Outstanding volumes have proliferated, new products have emerged, and more investors now pay attention to fixed-income as an asset class.

Yet beneath that expansion lies a more complicated story: concentration risk, real estate excesses, regulatory shocks, and persistent state intervention. The period from 2019 to 2023, in particular, showed how quickly confidence can evaporate when market discipline and transparency lag behind growth.

According to data from the Vietnam Bond Market Association (VBMA), outstanding corporate bond debt at the end of Q3 2025 reached VND 1.27 quadrillion (about USD 48.8 billion), equivalent to 7.4% of the banking system's total credit balance. The market size relative to GDP at the end of Q3 2025 was 10.2%, slightly lower than the previous quarter, and broadly flat compared with late 2023, fluctuating around VND 1.2 quadrillion (roughly USD 46–47 billion).

According to VNBIS analysis, the last decade can be divided into three phases:

• 2015–2018: Gradual development, dominated by government bonds and bank-related issuance.
• 2019–2021: Fast expansion, especially in real estate bonds, under low interest rates and loose structures.
• 2022–2023: Abrupt tightening, enforcement actions, defaults, and a sharp loss of investor trust.
• 2024–2025: Partial, fragile recovery under a stricter regulatory regime and closer supervision.

The bond market has clearly grown, but whether it has become structurally safer remains an open question.

Corporate Bonds in 2025: Short Maturities & Higher Yields

In Q3 2025, corporate bond issuance showed signs of stabilisation, but in a way that still reflects elevated risk.

VBMA data indicates that the market recorded:

• 10 public issuances worth VND 20,380 billion (≈ USD 0.78 billion)
• 119 private placements worth VND 108,939 billion (≈ USD 4.19 billion)

Private placements made up 84.2% of issuance value, highlighting that the corporate bond market in Vietnam stays mainly over-the-counter and relationship-based, rather than fully transparent and exchange-traded.

The sector breakdown reveals a familiar pattern:

• Banking sector:
  – Issuance of VND 90,777 billion (≈ USD 3.49 billion)
  – 70.2% of total Q3 issuance
• Real estate sector:
  – Issuance of VND 27,778 billion (≈ USD 1.07 billion)
  – 21.5% of Q3 issuance

Issuance since the beginning of 2025 is up 27% in value compared with the same period in 2024, indicating the market is not frozen. However, the structure of that issuance still deserves caution.

Around 53% of bonds issued in Q3 2025 had maturities of only 1–3 years, and the average coupon rate reached 7.18% per year, up 0.49 percentage points from Q2 and 0.58 points from Q3 2024. The increase in yield stems primarily from higher coupon rates on bank bonds.

From a risk perspective, higher yields and shorter tenors can be interpreted as a risk premium for uncertainty: issuers are paying more to roll over obligations, while investors prefer short-dated exposure in a market where confidence has not fully recovered.

According to VNBIS analysis, this pattern suggests that the corporate bond market in 2025 is functioning, but still heavily reliant on refinancing and vulnerable to any tightening in system liquidity or shifts in regulatory stance.

Government Bonds: Fiscal Anchor, But Still Policy-Driven

On the public sector side, the government bond (G-bond) market remains the anchor for funding the State budget and providing a benchmark yield curve.

In October 2025, the G-bond channel recorded a notable recovery:

• Issuance volume: VND 27,740 billion (≈ USD 1.07 billion)
• Month-on-month increase: 63.42%
• 20 auction sessions across four tenors
• Total offering volume: VND 67,500 billion (≈ USD 2.60 billion)
• Winning ratio: 41.4%

For the first 10 months of 2025, total G-bond issuance via auctions reached VND 283,429 billion (≈ USD 10.9 billion), equivalent to 56.7% of the full-year plan of VND 500,000 billion (≈ USD 19.2 billion). In October alone, issuance achieved 19.1% of the Q4 target, reflecting the seasonal pattern of accelerating fiscal financing toward year-end.

The tenor structure is also telling:

• 10-year bonds dominated with 65.3% of October’s winning volume (VND 18,115 billion ≈ , USD 0.70 billion).
• The 5-year, 15-year, and 30-year tenors saw winning volumes of VND 8,497 billion (≈ USD 0.33 billion), VND 1,080 billion (≈ USD 0.04 billion), and VND 48 billion (≈ USD 0.002 billion), respectively.

Secondary market liquidity for G-bonds has improved:

• Outright trading value in October: VND 280,583 billion (≈ USD 10.8 billion), up 16.6% month-on-month
• Repo trading: VND 107,306 billion (≈ USD 4.13 billion), up 13.2%
• Average daily outright turnover: VND 12,199 billion (≈ USD 0.47 billion), up 56.4% vs October 2024
• Average daily repo turnover: VND 4,665 billion (≈ USD 0.18 billion), up 12.5% year-on-year

Foreign investors, meanwhile, have started to return cautiously: net purchases of VND 281 billion (≈ USD 11 million) in October raised cumulative net buying in 2025 to VND 2,739 billion (≈ USD 105 million).

However, this is still a policy-driven market. Yields rose across most tenors in October compared with the end of September, by about 4.9 basis points for 7-year bonds, 10–11.4 bps for shorter tenors, and 14.5–19.7 bps for longer ones,reflecting interest-rate expectations, but also the interaction between State Treasury issuance plans and the banking system’s liquidity situation.

Secondary Corporate Bond Market:

The secondary corporate bond market has also seen higher turnover, though with nuances that warrant caution.

In October 2025:

• The total trading value of privately placed corporate bonds reached VND 101,755 billion (≈ USD 3.91 billion).
• Average trading per session was VND 4,424 billion (≈ USD 0.17 billion) — down 41% compared with the previous month’s average.

Earlier in Q3, secondary trading of privately placed bonds had reached VND 392,080 billion (≈ USD 15.1 billion), with an average daily value of VND 6.126 trillion (≈ USD 0.24 billion), up 15% from Q2. Trading remains concentrated in real estate and banking bonds, which accounted for 38.6% and 36.6% of value, respectively.

The data suggests an important nuance: turnover can rise while risk remains concentrated. Liquidity is not evenly distributed; it is clustered around a relatively small number of large issuers, many of them facing significant refinancing needs.

Credit Ratings: A Step Forward, but Not a Cure-All

One of the most significant reforms in recent years is the introduction of a mandatory credit rating for corporate bond issuance.

• Since 2023, public bond issuances must carry a credit rating.
• Since 2024, this requirement has also applied to private placements.
• Decree 245/2025/NĐ-CP further formalised the obligation for enterprises to obtain a rating when issuing bonds to the public.

To support this, the Ministry of Finance has promoted amendments to the Law on Securities and the Law on Enterprises, introducing clearer responsibilities for rating agencies and additional conditions for bond sales to individual investors.

The impact is visible in the numbers:

• In 2024, credit-rated bonds reached VND 216.6 trillion (≈ USD 8.33 billion), issued by 54 organizations, accounting for 46.3% of total market issuance.
• In the first 10 months of 2025, credit-rated bonds totaled VND 287.4 trillion (≈ USD 11.05 billion) — 2.1 timesthe same period in 2024.
• By the end of October 2025, outstanding bonds from rated issuers reached nearly VND 461 trillion (≈ USD 17.7 billion), or 33.7% of total corporate bond outstanding.

More than 140 enterprises in real estate, banking, energy, manufacturing, and securities have now obtained ratings.

According to VNBIS analysis, mandatory ratings:

• improve transparency and comparability,
• reduce information asymmetry,
• support more rational pricing, and
• help institutional investors define internal limits and risk frameworks.

However, ratings are not a substitute for due diligence, robust regulation, or credible enforcement. They are a tool, not a guarantee. The risk that rating opinions lag sudden shifts in issuer quality — especially in a system where disclosure norms are still evolving — remains real.

Risks Beneath the Surface

Despite signs of recovery, several key vulnerabilities continue to hang over the Vietnam bond market.

Refinancing wall

From the beginning of 2025 to October 31, total corporate bond issuance reached VND 481,944 billion (≈ USD 18.5 billion). At the same time, enterprises bought back VND 9,948 billion (≈ USD 0.38 billion) of bonds before maturity, 44% lower than the same period last year — partly reflecting limited cash buffers.

Looking ahead:

• About VND 32,731 billion (≈ USD 1.26 billion) in corporate bonds will mature in the last two months of 2025.
• Around VND 213,561 billion (≈ USD 8.21 billion) will mature in 2026.

Real estate and banking bonds make up the bulk of those maturities. Any shock to property sales, credit growth, or policy frameworks could quickly transform refinancing risk into default risk.

Defaults and delayed payments

VBMA data shows that newly delayed principal and interest payments in Q3 2025 stood at VND 1,668 billion (≈ USD 64.1 million), down 80% from Q2. Of that, VND 639 billion (≈ USD 24.6 million) has since been settled. Yet, five bond codes were still recorded as late on interest payments in October, totaling VND 714 billion (≈ USD 27.5 million).

The situation is better than during the peak of the 2022–2023 turmoil, but it is not fully resolved.

Sector concentration and limited diversification

From the beginning of 2025 to the end of October, 69% of issuance value came from commercial banks, and 23% from real estate companies. Other sectors — manufacturing, energy, infrastructure — are still comparatively small participants, limiting the market’s diversification benefits.

Heavy state influence and administrative control

Finally, the role of the State remains both stabilising and distorting. The government is a major issuer through G-bonds; state-owned enterprises are large players; and policy is frequently implemented through administrative guidelines and directives rather than purely rule-based mechanisms.

This means:

• Non-market considerations can influence market outcomes.
• SOEs may receive preferential treatment or implicit expectations.
• Regulatory risk remains significant, as abrupt changes in guidance can affect valuations and issuance plans.

According to VNBIS analysis, the hybrid model (part market, part administrative) is one of the core structural risks. It can cushion shocks in the short term, but it also makes the system more vulnerable to policy mistakes and sudden shifts in official stance.

Opportunities & Conditions for a Safer Bond Market

Despite these vulnerabilities, Vietnam’s bond market still holds substantial long-term potential:

• It can help reduce reliance on bank credit.
• It can channel long-term funding into infrastructure, green energy, and industrial upgrading.
• It can support the development of professional institutional investors, including pension funds and insurers.

However, realising that potential requires more than higher issuance numbers. It depends on:

• Consistent, predictable regulation, less reliant on ad-hoc administrative guidance;
• Stronger enforcement capacity, especially around disclosure, use of proceeds, and investor protection;
• A deeper investor base, with more long-term institutions and fewer speculative retail flows;
• Independent and credible credit rating agencies, supported but not controlled by regulators or major issuers.

The lesson from the last decade is clear: a crisis in Vietnam’s bond market tends to arrive suddenly, often after a period of apparent calm. The 2025 recovery is real, but it is also fragile.

Whether the next ten years will bring genuine maturity or another cycle of boom and correction will depend on how quickly and how credibly Vietnam can strengthen the foundations beneath its impressive growth.