What is the lead underwriter/ co-lead underwriter selection process for issuance of government bonds in Vietnam in 2024?
What is the lead underwriter/ co-lead underwriter selection process for issuance of government bonds in Vietnam in 2024?
Pursuant to the provisions of Clause 1, Article 16 of Decree 95/2018/ND-CP, Issuance of government bonds through underwriting is a method of offering government bonds through an underwriter syndicate, which is comprised of:
- A lead underwriter and/or co-lead underwriters; and
- Syndicate participant(s).
Pursuant to Clause 3, Article 1 of Decree 83/2023/ND-CP, new regulations are supplemented to the lead underwriter/ co-lead underwriter selection process from January 15, 2024 as follows:
(1) The State Treasury that wishes to issue bonds through underwriting shall publish the bond underwriting plan on its website and websites of the Ministry of Finance of Vietnam and the Stock Exchange so that interested organizations may apply to become a lead underwriter/co-lead underwriter. Information to be published includes:
Information about the bond issue through underwriting, including: Fundamental terms and conditions of the bond (currency, term, face value, and method for principal and interest payment); quantity of bonds to be issued; planned interest rate applicable to each term; planned date of issuance, issuance method; planned date of negotiation and conclusion of underwriting agreement;
Information concerning the selection of the lead underwriter/ co-lead underwriter: Eligibility requirements and standards of the lead underwriter/ co-lead underwriter as set forth in Clause 2 of Article 16 of Decree 95/2018/ND-CP; deadline and location for submission of applications for registration as lead underwriter/ co-lead underwriter.
(2) Any organization that meets all eligibility requirements and wishes to become a lead underwriter/co-lead underwriter shall submit a sealed application directly to the State Treasury or by post to the address notified by the State Treasury. Such application includes:
The application form for registration as the lead underwriter/ co-lead underwriter made by using Form No. 05 provided in the Appendix enclosed with Decree 83/2023/ND-CP;
The underwriting plan, which shall, inter alia, include the following information: forecasts about the bond market and capacity for issuing bonds through underwriting; detailed underwriting plan for the bond issue (planned syndicate participants, underwriting method and duration, planned quantity and interest rate), proposed underwriting fee; commitments of the lead underwriter;
Documentary evidences of the satisfaction of eligibility requirements by the lead underwriter/co-lead underwriter, including: copy from the master register, copy certified by a competent authority, or a copy presented together with its original for verification purpose, of the enterprise registration certificate, license for establishment and operation, or another document of equivalent validity; documents proving the applicant’s business experience in securities underwriting.
(3) When the application submission deadline expires, the State Treasury shall establish a team in charge of opening properly sealed applications for evaluating and selecting qualified lead underwriter/ co-lead underwriter based on relevant requirements and underwriting plan.
(4) Within a maximum duration of 15 working days from the application submission deadline, the State Treasury shall notify lead underwriter/ co-lead underwriter selection results in writing to applicants, and publish such results on its website and on the websites of the Ministry of Finance of Vietnam and the Stock Exchange.
(5) The State Treasury and the selected lead underwriter/co-lead underwriter shall conduct negotiations and enter into the principle contract for bond underwriting using the form prescribed by the Ministry of Finance of Vietnam. The principle contract shall be used as the basis for the lead underwriter/co-lead underwriter to select syndicate participant(s).
(6) The lead underwriter/co-leader underwriter shall select qualified entities to participate in the underwriting syndicate, and submit a list of selected syndicate participants which is made using the form prescribed by the Ministry of Finance of Vietnam to the State Treasury for consideration and approval.
What is the lead underwriter/ co-lead underwriter selection process for issuance of government bonds in Vietnam in 2024?
Which entity is the issuer of government debt instruments in Vietnam?
Pursuant to the provisions of Article 4 of Decree 95/2018/ND-CP:
- Issuer of government debt instruments is the Ministry of Finance.
- With regard to government debt instruments issued in domestic market, the Ministry of Finance shall directly organize the issuance or authorize the State Treasury to organize the issuance and fulfill the issuer’s obligations as prescribed in Decree 95/2018/ND-CP.
Vietnam: How many forms of Government loans are there?
Pursuant to the provisions of Article 26 of the Law on Public Debt Management 2017, forms of Government loans include:
- Issues of debt instruments;
- Conclusion of loan agreements.
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