What are requirements for a forced loan from the Accumulation Fund for Debt Repayment regarding government guarantee for bond issuance in Vietnam?
What are requirements for a forced loan from the Accumulation Fund for Debt Repayment regarding government guarantee for bond issuance in Vietnam? What are guarantor’s obligations regarding government guarantee for bond issuance in Vietnam? What are regulations on using the Accumulation Fund for Debt Repayment for fulfilling the guarantor’s obligations regarding government guarantee for bond issuance in Vietnam?
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What are requirements for a forced loan from the Accumulation Fund for Debt Repayment regarding government guarantee for bond issuance in Vietnam?
Pursuant to Article 43 of the Decree 91/2018/NĐ-CP stipulating requirements for a forced loan from the Accumulation Fund for Debt Repayment regarding government guarantee for bond issuance in Vietnam as follows:
1. The obligor must enter into a forced loan agreement with the Ministry of Finance (the Accumulation Fund for Debt Repayment) for each forced loan given upon the occurrence of the events mentioned in Article 41 herein under the following conditions:
a) The obligor irrevocably authorizes the Accumulation Fund for Debt Repayment to transfer the borrowed amount directly to the lender, and this amount is considered the principal of the forced loan from the Accumulation Fund for Debt Repayment;
b) Borrowing and debt repayment currency: the original currency specified in the loan agreement or bond issuance agreement. Debts shall be paid in the loan currency or in VND according to the selling rate officially announced by Vietcombank at the time of debt repayment;
c) Loan interest: the interest rate on the government-guaranteed loan or bond issue. The adjustment of the interest rate on the forced loan granted by the Accumulation Fund for Debt Repayment shall be subject to the adjustment of the interest rate on the guaranteed loan or bond issue during the loan term;
d) The interest on the forced loan granted by the Accumulation Fund for Debt Repayment shall be charged on the outstanding debt over the actual days of loan from the date on which the Ministry of Finance transfers money to pay debts to the lender to the date on which the obligor pays the loan in full to the Ministry of Finance on an annual basis of 365 days;
dd) Loan term: The Minister of Finance shall, depending on the solvency of each project, consider deciding the term of the forced loan which is granted to pay interests for not more than 02 repayment periods, or to pay the principal (and interest, if any) for a period of not exceeding 02 years. In case the term of a forced loan exceeds the prescribed periods, the Ministry of Finance shall request the Prime Minister to consider and make decision;
e) The principal and interest on the forced loan from the Accumulation Fund for Debt Repayment shall be paid on a biannual basis;
g) Sources of funding for giving loans of the Accumulation Fund for Debt Repayment are prescribed in Point d Clause 4 Article 56 of the Law on public debt management;
h) The obligor shall incur all expenses actually arisen from the transfer of money to pay debts for the obligor;
i) The obligor shall pay interest on late payment in accordance with law regulations on establishment, management and use of the Accumulation Fund for Debt Repayment.
2. The forced loan agreement must be concluded before the Ministry of Finance transfers money to pay debts to the obligee on behalf of the obligor.'
What are guarantor’s obligations regarding government guarantee for bond issuance in Vietnam?
Pursuant to Article 44 of the Decree 91/2018/NĐ-CP stipulating guarantor’s obligations regarding government guarantee for bond issuance in Vietnam as follows:
1. Upon the receipt of the request for debt repayment from the obligee, the Ministry of Finance shall transfer money from the Accumulation Fund for Debt Repayment to the obligee in conformity with regulations in Point d Clause 1 Article 48 and Point b Clause 4 Article 56 of the Law on public debt management.
2. The Ministry of Finance shall give a forced loan to the obligor before making payment to the obligee but after the obligor has satisfied all of requirements mentioned in Article 42 herein.
What are regulations on using the Accumulation Fund for Debt Repayment for fulfilling the guarantor’s obligations regarding government guarantee for bond issuance in Vietnam?
Pursuant to Article 45 of the Decree 91/2018/NĐ-CP stipulating regulations on using the Accumulation Fund for Debt Repayment for fulfilling the guarantor’s obligations regarding government guarantee for bond issuance in Vietnam as follows:
1. If the balance of the Accumulation Fund for Debt Repayment is not enough to give a loan to the obligor to pay debts to the obligee, the Ministry of Finance shall submit a report to the Government under regulations in Clause 7 Article 56 of the Law on public debt management.
2. In case the obligor is insolvent but the proceeds from collateral disposal are also not enough to pay debts to the Accumulation Fund for Debt Repayment in full, and the parent company of the obligor (if any) is unable to pay debts for the obligor, the Ministry of Finance shall submit a report to the Prime Minister to decide measures against debts which cannot be collected.
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