Vietnam corporate bond rates climb toward 2022 highs

Banks are feeling it too. Their average issuance cost in the quarter was about 8.85% annually, above the 8.7% average seen in 2022, with some lenders paying more than 10%. Sacombank sold fixed-rate bonds at 10%, while PVcomBank issued paper tied to 12-month retail savings rates plus 4.6 percentage points, or about 10.4%. Fiin Ratings said banks are lifting deposit and bond rates to pull in funds because credit growth is running ahead of deposit growth, and it expects funding costs to stay flat rather than ease in the fourth quarter.

That is important for investors because higher borrowing costs usually favor stronger credits and punish the rest. Fiin Ratings said issuers with better credit quality should keep access to the market, while weaker borrowers may have to delay or shrink planned sales. For bondholders, that can mean a wider spread between companies that can still refinance comfortably and those that need to pay up for every dong of funding.

The pressure is sharpest in property and other capital-hungry sectors, where new issuance rates averaged 12.5% to 13% a year, still below the 2022-2023 peak but high enough to keep many projects on the sidelines. Large developers including Vinhomes, Thái Sơn Construction, Cần Giờ Urban and Tourism, and Thành Phố Xanh have all tapped the market above 12.5%, while Khải Hoàn Land and Tandoland have paid above 13%. At those levels, bonds remain a viable funding tool, but only if the expected return on the project or asset being financed comfortably clears the cost of capital.

The bigger economic story is that Vietnam’s bond market is still expanding, but cautiously. New issuance in the first nine months reached 464.1 trillion dong, while outstanding corporate bonds rose 7.1% from the end of 2025 to 1.54 quadrillion dong after redemptions and maturities. S&I Ratings said that is slower than GDP growth over the same period and slower than 11.59% credit growth, underscoring that the bond market is not yet filling the long-term financing gap as quickly as policymakers would like.

That gap matters because demand for medium- and long-term capital is rising across real estate, infrastructure, energy and industrial projects. Corporate bonds are still an important supplement to bank lending, especially as banks keep a tight grip on property exposure and the system’s credit growth ceiling remains in place. But the combination of high domestic rates, elevated global yields and inflation risk suggests funding costs may stay elevated well into the first half of 2027.

For long-term investors, the message is simple: expensive debt usually rewards the best-run companies and exposes the overleveraged ones. The issuers with strong balance sheets, stable cash flow and credible refinancing plans are the ones most likely to come through this period intact, while highly geared borrowers may need to wait for a friendlier rate backdrop. That makes credit quality more important than ever, and it argues for patience, selectivity and a focus on companies that can thrive even when borrowing stays costly.