Only seven investors joined in the bidding, having registered to buy up to $362.1 million worth of bonds.

The lowest coupon bid was 2.15 percent and the highest, 7 percent. The winning bidders will receive interest of 3.6 percent per year when the bond matures in 2012.

The bonds will become fully negotiable on the secondary market in accordance with Vietnamese law.

Analysts agreed that the interest rates on the longer-term dollar bonds restrained the success of the final tranche.

"The bond term was longer in each bid, but the interest rate stayed the same, at around 3 to 4 percent a year," said an analyst at Standard Chartered Viet Nam, who asked to remain anonymous.

In addition, US dollar values were complicating the picture, leaving bidders unsure as to whether they could count on US dollar values in a month's time, let alone in a year, said an economist from the Fullbright Economic Teaching Programme, who also asked to have his name withheld.

"Bidders can see the risk of the loss they could get from complex relationship between the value of the US dollar and the bond coupons. Then they became hesitant to pour money into the dollar bonds," he said.

This economist also believed it would be hard to say whether dollar bond trading would be active on the secondary market. "The activeness depends on the value of the US dollar and the status of the US economic crisis."

Source: Vietnam News