The Government of the Socialist Republic of Vietnam has successfully closed its USD1 billion sovereign bond offering, as part of an innovative “debt switch” liability management exercise.

The transaction comprised a simultaneous cash tender offer for certain existing bonds and an offering of new bonds, including a private placement to qualified institutional buyers in the United States in reliance on Rule 144A. Deutsche Bank, HSBC and Standard Chartered Bank were mandated as dealer-managers of the tender offer and joint lead managers of the new bond offering. Allen & Overy advised the Government of Vietnam on this transaction. Vietnam’s most recent USD-denominated bond issue was in 2010, on which Allen & Overy also advised.

Commenting, Allen & Overy Hong Kong-based US partner Alexander Stathopoulos said: “We are very pleased to have once again advised the Government of Vietnam on this very successful offering, which highlights the depth and expertise of Allen & Overy’s sovereign bond practice. This transaction, which involved the innovative debt switch structure, was also among the first to implement collective action clauses and other bond terms reflecting those recently endorsed by the IMF, which we believe is an important step in balancing the interests of sovereign issuers and creditors in the international capital markets.”

Allen & Overy Vietnam-based partner Duc Tran added: “This significant sovereign bond issuance for Vietnam reflects the country’s desire to attract further international investment under the right market conditions, and we are delighted to have assisted the government on this transaction. Allen & Overy has established a strong track record of success in Vietnam, advising on many of the largest and most innovative transactions in this market since the mid-1990s. This transaction follows our work on other high-profile transactions this year alone in the country, such as the USD9 billion Nghi Son Refinery and Petrochemical Project, the largest project financing in Vietnam to date; and advising Kinh Do Corporation on what is reported to be one of the largest cross-border M&A transactions to date in Vietnam and the largest ever in the Vietnamese FMCG sector.”

The Allen & Overy team was led by partners Alexander Stathopoulos and Walter Son on the international law aspects and Duc Tran on the Vietnamese law aspects. Additional advice was provided by associates Paul Porter, Grace Yumul, Nathaniel Lai in Hong Kong and Quy Nguyen in Vietnam.