Vietnam to sell 500 bln dong govt bonds on July 16

HANOI, July 14 (Reuters) - Vietnam's State Treasury plans to raise 500 billion dong ($30.3 million) at a government bond auction this week, the Hanoi stock market said on Monday.

The State Treasury would sell 10-year bonds worth 300 billion dong and 15-year bonds worth 200 billion dong on Wednesday and issue the debt on July 18, the over-the-counter exchange said in a statement.

The proceeds will finance major infrastructure projects such as roads, bridges and ports.

At its latest auction on July 11, the State Treasury failed to sell any of its two-year and three-year bonds worth a combined 500 billion dong because no participants joined the auction, the exchange said in a separate statement.

On June 27, the State Treasury sold 2 billion dong worth of two-year bonds with a yield of 11 percent, its first success in raising funds from selling government debt after seven auctions since late February which yielded no buyers.

Banks, which often buy government bonds, have been struggling to raise dong funds as the central bank tightened monetary supply by raising interest rates and ordered banks to buy debt to rein in inflation that hit an annual rate of 26.8 percent in June.

The central bank aims to cap Vietnam's credit growth this year at 30 percent after a surge of 54 percent in 2007.

Ratings agencies have downgraded their outlook on Vietnam's sovereign ratings to negative, noting that economic imbalances were greater than anticipated and policies had not dealt quickly or strongly enough with inflation. ($1=16,510 dong) (Reporting by Ho Binh Minh; Editing by Ben Tan)