On 31 December 2020, the Government enacted Decree No. 153/2020/ND-CP stipulating the offering and trading corporate bonds under private placement domestically and offering corporate bonds to the international market.
This new Decree takes effect from 01 January 2021 and takes place 02 previous Decrees:
– Decree No. 163/2018/ND-CP;
– Decree No. 81/2020/ND-CP
The new Decree regulates on the conditions for offering corporate bonds under private placement domestically as follows:
1.For offering inconvertible bonds without warrant (excluding offering bonds of securities companies and securities investment fund management companies which are not public companies):
(a) Enterprises have to be Joint-stock companies or Limited liability companies established and operated under the laws of Vietnam;
(b) Enterprises have to pay in full both principal and interest of issued bonds or pay in full due debts in 03 consecutive years before the bonds private placement (if any), except for offering bonds for creditors which are the chosen finance organizations;
(c) Enterprises have to meet the financial safety ratio and safety ratio in operation in accordance with the specialized laws;
(d) Enterprises must have private placement plan of bonds approved by the competent authority according to Article 13 of Decree No. 153/2020/ND-CP.
(e) Enterprises must have financial reports of the previous year preceding the year of issuance, which are audited by the qualified Auditing Organization in accordance with Decree No. 153/2020/ND-CP.
(f) Subjects taking part in the offering placement are in compliance with the regulations at Point a Clause 1 Article 8 of Decree No. 153/2020/ND-CP.
2.For offering inconvertible bonds without warrant of securities companies and securities investment fund management companies which are not public companies
Enterprises have to fully satisfy conditions (a), (c), (d), (e) and (f) as mentioned at Section 1 above.
3.For offering convertible bonds or bonds with warrant
- Issuing enterprises have to be Joint-stock companies;
- Subjects taking part in the offering placement are in compliance with the regulations at Point b Clause 1 Article 8 of Decree No. 153/2020/ND-CP;
- Enterprises must fully satisfy conditions (b), (c), (d) and (e) as mentioned at Section 1 above;
- The offerings of convertible bonds, private bonds with warrant must be at least 06 months apart from the completion date of the latest offering;
- The conversion of bonds into stocks and performance of warrants have to meet the regulations on the ownership ratio of foreign investors in accordance with the laws.