Tightening short-term capital for medium and long-term lending: Filling the capital gap with bonds

The need for infrastructure investment capital by 2030 is estimated to reach 245 billion USD while the banking industry is tightening the ratio of short-term capital for medium- and long-term loans. To fill the capital gap, according to experts, Vietnam needs to further develop the corporate bond market.

In a report on future capital flows, VIS Rating analysts estimated that in the 2025-2030 period, our country is estimated to need about 245 billion USD for highways, high-speed railways and energy projects, while public investment only meets 70% of the expected capital demand.

In recent years, private investment has gradually become the main driving force, accounting for more than 50% of total registered capital for fixed asset investment. While the bank credit channel is being tightened due to the State Bank of Vietnam (SBV) tightening the use of short-term deposits for long-term loans, the role of the bond channel has become more important than ever.

Typically, outstanding bank loans for toll road projects have decreased by an average of 6% per year in the period 2020 - 2024. Therefore, to fill the gap in capital sources for infrastructure, VIS Rating experts believe that Vietnam needs to further develop the corporate bond market and attract long-term private capital.

Recent regulatory changes are paving the way for project companies to issue bonds with more flexibility – for example, the revised PPP Law allows infrastructure project companies to issue bonds privately and list the bonds immediately after issuance.

The government is also increasing its equity contribution to reduce debt burdens and improve the creditworthiness of project companies. A forthcoming decree allowing public offerings of infrastructure bonds without a financial history is expected to further unlock bond capital for infrastructure projects.

While issuance conditions will be relaxed, post-issuance controls will be tightened, such as setting up custodian banks, independent accounting accounts and disbursement according to prescribed schedules, creating a more solid legal framework.

In addition, the corporate bond channel now requires stricter disclosure requirements, tighter issuance conditions, and mandatory credit ratings, helping to strengthen investor confidence and improve transparency. Together, these reforms will position corporate bonds as a viable long-term funding tool for Vietnam’s infrastructure ambitions.

In this context, VIS Rating experts believe that credit guarantees and credit ratings are important tools to tap private capital for infrastructure projects.

Credit ratings also assess the impact of credit guarantees, collateral, and debt repayment structures – setting clearer standards for risk pricing and improving the liquidity of project bonds. Together, these tools are essential to expanding infrastructure bond issuance and attracting long-term private capital.

Source: https://baodautu.vn/siet-von-ngan-han-cho-vay-trung-dai-han-lap-khoang-trong-von-bang-trai-phieu-d342723.html