Conditions for offering bonds to the international market in Vietnam

What are the conditions for offering bonds to the international market in Vietnam’s law? What is the process of offering bonds to the international market?

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Legal grounds

– Enterprise Law 2020

– Decree No. 153/2020/ND-CP

Consulting content

Principles of bond issuance and use

– Enterprises issue bonds on the principle of self-borrowing, self-paying, self-responsibility for capital efficiency, and debt repayment ability.

– Bond issuance purposes include: implementing investment programs and projects; increasing the scale of working capital; restructuring the capital source of the enterprise or the purpose of issuing bonds by specialized laws.

– Besides, enterprises must specify the issuance purpose in the issuance plan as prescribed in Article 13 of this Decree, and disclose information to investors registering to buy bonds. Moreover, the use of capital raised from the issuance of bonds by enterprises must ensure the right purposes according to the issuance plan; and content of information disclosure for investors.

– Then, for the issuance of green bonds, apart from the provisions in Clauses 1 and 2 of this Article; capital from bond issuance must be separately accounted for, managed, monitored, and disbursed for projects in the field of environmental protection; projects with environmental benefits according to the approved release plan.

Conditions for offering bonds to the international market

Article 25 of Decree 153/2020/ND-CP stipulates conditions for offering bonds to the international market. Specifically

For non-convertible bonds without warrants

– Issuing enterprise is a joint-stock company or a limited liability company established and operating under Vietnamese law;

– Then, the plan to issue bonds to the international market is approved and approved by the competent authority according to the provisions of Article 28 of this Decree;

– Satisfy financial adequacy ratio and operational safety ratio by specialized laws;

– Besides, comply with regulations on management of foreign loans and repayment of enterprises which not guaranteed by the Government and the law on foreign exchange management;

– The conditions of the offering are as prescribed in the issuing market.

For convertible bonds or warrant-linked bonds

– Issuing enterprise is a joint-stock company that meets the issuance conditions specified in Clause 1 of this Article;

– Then, the conversion of bonds into shares and the exercise of warrants attached must meet the regulations on foreign investors’ ownership ratio by the law;

– The offering of convertible bonds and warrant-linked bonds must be separated by at least 06 months from the date of completion of the latest offering.

The process of offering bonds to the international market

For an international offering of bonds by a company that is not a public company

– Enterprises prepare dossiers of bond offering according to the provisions of Article 27 of this Decree and organize an offering in the issuing market.

– Issuing enterprises shall disclose information according to the provisions of Articles 29, 30, and 31 of this Decree; and regulation of the issuing market.

For the public company’s international offering of bonds; securities companies, securities investment fund management companies

– Enterprises prepare dossiers of bond offering according to the provisions of Article 27 of this Decree and send them to the State Securities Commission.

– Within 10 days from the date of receipt of complete and valid dossiers; the State Securities Commission approved in writing; In case of refusal, the State Securities Commission shall reply in writing and clearly state the reasons therefor.

– After the State Securities Commission approves; Enterprises shall disclose information before offering for sale by Article 29 of this Decree and conduct bond offerings by the regulations of the issuance market.

– Within 10 days from the date of completion of the offering; The enterprise shall report the results of the offering according to the form in Appendix IV issued with this Decree to the State Securities Commission.

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