What are the requirements for offering warrant-linked bonds in the Vietnamese market? Who can buy warrant-linked bonds in the Vietnamese market?
Who can buy warrant-linked bonds in the Vietnamese market?
Pursuant to Clause 5, Article 4 of Decree 153/2020/ND-CP, the definition of warrant-linked bonds is as follows:
“warrant-linked bond” means a type of bonds which are issued by a joint-stock company with warrants that entitle bondholders to buy a specific number of common shares of the issuer under terms and provisions predetermined in the bond issuance plan.
Regarding buyers of warrant-linked bonds, according to Point b, Clause 1, Article 8 of Decree 153/2020/ND-CP (amended by Clause 6, Article 1 of Decree 65/2022/ND-CP) there are provisions:
Bonds buyers
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1. Eligible bond buyers
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b) Buyers of convertible bonds and warrant-linked bonds are professional investors and strategic investors of which the number of strategic investors of an issue is limited to 100.
Thus, buyers of warrant-linked bonds are professional investors and strategic investors of which the number of strategic investors of an issue is limited to 100.
What are the requirements for offering warrant-linked bonds in the Vietnamese market? Who can buy warrant-linked bonds in the Vietnamese market?
What are the requirements for offering warrant-linked bonds in the Vietnamese market?
Pursuant to Clause 3, Article 9 of Decree 153/2020/ND-CP, in order to carry out the offering of warrant-linked bonds, the following requirements must be met:
- The issuer is a joint stock company.
- Entities participate in the offering are professional investors and strategic investors of which the number of strategic investors of an issue is limited to 100.
- The following offering conditions are satisfied:
+ It has fully paid principals and interests of bonds issued or due debts in the last 03 consecutive years preceding the bond offering (if any), except the offering of bonds to creditors that are selected financial organizations.
+ It has maintained adequacy ratios and prudential ratios in operations in accordance with regulations of specialized laws.
+ It must have a bond issuance plan approved and accepted as prescribed in Article 13 of Decree 153/2020/ND-CP.
+ Its financial statements of the year preceding the year of issuance have been duly audited by an accredited audit organization according to regulations herein.
- There is an interval of at least 06 months between two private placements of convertible bonds or warrant-linked bonds.
- The conversion of bonds into shares and execution of warrants must ensure the ratio of holding by foreign investors as prescribed by law.
What are the procedures for offering warrant-linked bonds of a public company in Vietnam?
Pursuant to Clause 2, Article 11 of Decree 153/2020/ND-CP, in case a public company in Vietnam offers warrant-linked bonds, the following procedures shall be carried out:
Step 1: The issuer shall prepare a bond offering dossier.
Step 2: The issuer shall send 01 set of the bond offering dossier prescribed in Point a of this Clause to the State Securities Commission of Vietnam. Within 10 days from the receipt of adequate and valid dossier, State Securities Commission of Vietnam shall give written approval. If a dossier is refused, State Securities Commission of Vietnam shall give a written response in which reasons for such refusal must be specified.
Step 3: After obtaining the written approval from State Securities Commission of Vietnam, the issuer shall disclose information before the offering and organize the issuance of bonds according to Point b, Point c Clause 1 Article 11 of Decree 153/2020/ND-CP.
Proceeds from the offering shall be transferred to the escrow account opened at a bank or foreign bank branch. Opening and use of escrow account shall comply with regulations on offering, issuance of securities and tender offer laid down in the Decree providing guidelines for implementation of the Law on Securities.
Step 4: Within 10 days from the completion date of the offering, the issuer shall submit a report on offering results, made according to the form in Appendix III enclosed herewith, enclosed with confirmation of proceeds given by the bank or foreign bank branch where the escrow account is opened, to State Securities Commission of Vietnam.
Within 03 working days from the receipt of the adequate report on offering results, State Securities Commission of Vietnam shall give a notification to the issuer and publish information about the offering results on its website.
Step 5: After receiving the notification from State Securities Commission of Vietnam, the issuer shall have the proceeds from the bond offering in escrow released.
Step 6: The issuer shall carry out procedures for registration and depositing of bonds.
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