What are conditions for selling private placement of bonds of the Local Development Investment Fund in Vietnam?

What are conditions for selling private placement of bonds of the Local Development Investment Fund in Vietnam?

Based on Clause 2, Article 37 of Decree No. 147/2020/ND-CP on the issuance of bonds of the Local Development Investment Fund as follows:

2. Conditions for offering to sell private placement of bonds of the Local Development Investment Fund:

a) The Fund must have been in operation for a minimum of 01 year from the date the Provincial People's Committee issues the Decision to establish the Fund.

b) The Fund is evaluated and classified by the Provincial People's Committee based on the effective activities of the previous year adjacent to the issuance year as prescribed in this Decree and the guidance of the Ministry of Finance.

c) Ensure compliance with regulations on investors buying and trading individual corporate bonds as prescribed by law on offering to sell individual corporate bonds.

d) Have a specific plan for issuing private placement of bonds approved by the Provincial People's Committee, which specifies the purpose of using capital from the bond issuance and the source of funds allocated to repay principal and bond interest when due.

e) Make full payment of both principal and interest of the bonds already issued or make full payment of all debts due within the 03 consecutive years before the bond issuance (if any), except for cases of issuing bonds to selected financial institutions.

f) Meet the investment, lending, and capital mobilization limits as prescribed in this Decree.

Therefore, when the Local Development Investment Fund meets all the above conditions in Vietnam, it can independently offer to sell private placement of bonds on the market.

What are conditions for selling private placement of bonds of the Local Development Investment Fund in Vietnam? (Image from the Internet)

What is determination of interest rate for loans of the Local Development Investment Fund in Vietnam?

Article 25 of Decree No. 147/2020/ND-CP stipulates the interest rate for loans of the Local Development Investment Fund as follows:

1. The minimum loan interest rate of the Local Development Investment Fund is determined based on the principle of not lower than the average mobilization interest rate of the mobilized capital sources, taking into account the opportunity cost of equity capital, ensuring compensation for management costs, risk provision costs for loans, and other related costs of lending activities.

2. Annually or within each period, based on the principle of determining the minimum loan interest rate as prescribed in Clause 1 of this Article, the Fund Director calculates and submits to the Fund's Board of Directors for approval to report to the Provincial People's Committee to issue a decision on the minimum loan interest rate of the Local Development Investment Fund.

3. The Local Development Investment Fund decides the interest rate for loans for each specific project, but not lower than the minimum loan interest rate determined by the Provincial People's Committee as prescribed in Clause 2 of this Article.

4. For projects using funds from international donors with loan interest rate provisions different from those in this Decree, they shall be implemented according to the agreements signed with the donors.

Best Regards!