The corporate dong market continued to grow by about 30% annually in both 2017 and 2018, with its size at the end of last year totaling D99tr, or the equivalent of more than $4bn. That size is remarkable, considering that the market reached just $1.6bn at the end of 2014, when the Credit Guarantee & Investment Facility (CGIF) guaranteed its first dong-denominated bond.
“You need a lot of education to convince a company to issue a bond and to understand the benefits of bond finance,” said Nishimura.
CGIF is a multilateral facility established by the Association of Southeast Asian Nations (“ASEAN”) members, China, Japan, Korea (“ASEAN+3”) and Asian Development Bank (“ADB”). It is established as a trust fund of ADB with a paid-in capital of USD 859.2 million from its contributors. As a key component of the Asian Bond Markets Initiative, CGIF was established to develop and strengthen local currency and regional bond markets in the ASEAN+3 region. CGIF commenced its guarantee operations on 1 May 2012 and seeks to provide credit enhancements, mainly in local currencies, issued by credit worthy ASEAN+3-domiciled bond issuers.