Vietnam to sell 1 trln dong govt bonds on Sept 5

HANOI, Aug 28 (Reuters) - Vietnam's State Treasury plans to raise 1 trillion dong ($61 million) at a government bond auction late this week, the Hanoi over-the-counter exchange said.

The auction will sell two-year bonds worth 500 billion dong and three-year bonds worth 500 billion dong next Friday, and the debt will be issued on Sept 9, the exchange said in a statement late on Wednesday.

Once sold, the bonds are to be listed for trade on the exchange and the proceeds will fund major infrastructure projects such as roads, bridges and ports.

At its latest auction on Aug 22, the State Treasury sold 340 billion dong worth of two-year bonds, 34 percent of its offer, at a yield of 16.5 percent and raised 430 billion dong via selling three-year bonds with a yield also of 16.5 percent.

Yields on two-year bonds edged up to 17.296 percent on Wednesday from 17.6 percent on Tuesday but down from 17.45 percent a week ago. Three-year debt yields also fell to 17 percent from 17.3 percent on Sept 20 VNBMKFIXINGS02.

Ratings agencies have downgraded their outlook on Vietnam's sovereign ratings to negative, noting economic imbalances were greater than anticipated and policies had not dealt quickly or strongly enough with inflation. ($1=16,496 dong) (Reporting by Ho Binh Minh; Editing by Anshuman Daga)