When are corporate actions for holders of privately-placed bonds performed? How to make bond interest payment by using other assets in Vietnam?
When are corporate actions for holders of privately-placed bonds performed?
Pursuant to Clause 1, Article 8 of Circular No. 30/2023/TT-BTC, corporate actions for holders of privately-placed bonds shall be performed in the following cases:
- Get opinions from bondholders;
- Pay bond principal and interest amounts;
- Convert convertible bonds;
- Carry out bond swap;
- Redeem bonds before maturity;
- Exercise other rights as prescribed by law.
How to make bond interest payment by using other assets in Vietnam?
Pursuant to the provisions of Clause 2, Article 8 of Circular No. 30/2023/TT-BTC guiding as follows:
Performance of corporate actions for holders of privately-placed bonds
…
2. In case the issuer makes principal and interest payments due to bondholders using assets in Article 1 of the Decree No. 08/2023/ND-CP:
a) If assets are securities registered at Vietnam Securities Depository and Clearing Corporation (VSDC), the transfer of securities ownership shall comply with the provisions of the Circular No. 119/2020/TT-BTC;
b) If assets are not securities registered at VSDC, payment shall be made at the issuer. The issuer shall assume the full responsibility to make payments to bondholders in accordance with regulations of laws.
Thus, for bonds offered for sale in the Vietnamese market, in case the issuing enterprise is unable to pay in full and on time the bond principal and interest in Vietnam dong according to the issuance plan announced to investors as prescribed in Article 17 of Decree No. 153/2020/ND-CP, enterprises may negotiate with bondholders to pay bond principal and interest with other assets as follows:
- If assets are securities registered at Vietnam Securities Depository and Clearing Corporation (VSDC), the transfer of securities ownership shall comply with the provisions of Circular No. 119/2020/TT-BTC;
- If assets are not securities registered at VSDC, payment shall be made at the issuer. The issuer shall assume the full responsibility to make payments to bondholders in accordance with regulations of laws.
When are corporate actions for holders of privately-placed bonds performed? How to make bond interest payment by using other assets in Vietnam?
When must the issuer notify VSDC of using other assets for making principal and interest payments to bondholders?
Pursuant to Clause 3, Article 8 of Circular No. 30/2023/TT-BTC stipulating this issue as follows:
Performance of corporate actions for holders of privately-placed bonds
…
3. In case the issuer changes terms and conditions of bonds or makes principal and interest payments due to bondholders using assets in Article 1 or Article 2 of the Decree No. 08/2023/ND-CP resulting in failure to make cash payments of principal and interest amounts to all bondholders according to information on terms and conditions of bonds previously registered at VSDC, the issuer shall itself make such payments to bondholders. The issuer shall assume the full responsibility to make payments to bondholders in accordance with regulations of laws.
4. The issuer shall be required to notify VSDC of its use of assets for making principal and interest payments to bondholders and its changes in terms and conditions of bonds as prescribed in Clause 2 and Clause 3 of this Article at least 05 working days before the payment date, and shall assume the full responsibility for its failure to do so or delayed notification of information to VSDC.
5. Performance of corporate actions for holders of privately-placed bonds registered at VSDC shall comply with the provisions of this Circular, Articles 8, 9 and 10 of the Circular No. 119/2020/TT-BTC and VSDC’s regulations on registration, depositing and settlement for transactions of privately-placed bonds.
Thus, the issuer shall be required to notify VSDC of its use of assets for making principal and interest payments to bondholders and its changes in terms and conditions of bonds at least 05 working days before the payment date, and shall assume the full responsibility for its failure to do so or delayed notification of information to VSDC.
Circular No. 30/2023/TT-BTC takes effect from July 1, 2023.
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