02 additional methods of issuing foreign currency bonds in Vietnam as of January 15, 2024

10:37, 04/12/2023

Will there be 02 additional methods of issuing foreign currency bonds in Vietnam as of January 15, 2024? - Chi Trung (Hai Phong)

02 additional methods of issuing foreign currency bonds in Vietnam as of January 15, 2024 (Internet image)

On November 29, 2023, the Government issued Decree 83/2023/ND-CP amending a number of articles of Decree 95/2018/ND-CP providing for issuance, registration, listing and trading of government debt instruments on securities market in Vietnam.

02 additional methods of issuing foreign currency bonds in Vietnam as of January 15, 2024

Specifically, Decree 83/2023/ND-CP amended Article 22 of Decree 95/2018/ND-CP regulating foreign currency bonds as follows:

- Foreign currency bonds are government bonds issued in the domestic market in freely convertible currencies according to the Scheme approved by the Prime Minister.

- Based on the needs for funds of state budget, the Ministry of Finance of Vietnam shall take charge of and cooperate with the SBV in formulating the Scheme for issuance of government bonds in the domestic market in freely convertible currencies, and then submit it to the Prime Minister for consideration and approval. The Scheme shall, inter alia, include the following contents:

+ Purposes;

+ Quantity of bonds to be issued;

+ Terms and conditions of bonds: Term, face value; currency of bonds issued and currency used for payment of bonds; interest rate;

+ Bond issuance method (bidding, underwriting or private placement);

+ Prospective bond buyers as prescribed in this Decree and regulations of law on foreign exchange management;

+ Registration, depositing and trading of bonds.

- Based on the Scheme for issuance of foreign currency bonds approved by the Prime Minister of Vietnam, the Ministry of Finance of Vietnam shall organize the issuance of bonds in foreign currency.”

- Foreign currency bonds shall be registered and deposited at the VSD in accordance with regulations herein, and traded in accordance with applicable regulations of the Law on foreign exchanges.

Currently, Article 22 of Decree 95/2018/ND-CP regulates foreign currency bonds as follows:

- Foreign currency bonds are government bonds issued in the domestic market in freely convertible currencies according to the Scheme approved by the Prime Minister.

- Based on the needs for funds of state budget, the Ministry of Finance shall take charge and cooperate with the SBV in formulating the Scheme for issuance of government bonds in the domestic market in a freely convertible currency, and then submit it to the Prime Minister for consideration. The Scheme includes the following contents:

+ Purposes;

+ Quantity of bonds to be issued;

+ Terms and conditions of bonds: Term, face value; currency of bonds issued and currency used for payment of bonds; interest rate;

+ Bond buyers;

+ Registration, depositing and trading of bonds;

- Based on the Scheme for issuance of foreign currency bonds approved by the Prime Minister, the Ministry of Finance shall organize the issuance of bonds in foreign currency by adopting private placement method.

- Foreign currency bonds shall be registered and deposited at the VSD in accordance with regulations herein, and traded in accordance with applicable regulations of the Law on foreign exchanges.

Thus, compared to the current regulations, Decree 83/2023/ND-CP has added 02 methods of issuing foreign currency bonds: bidding and underwriting

More details can be found in Decree 83/2023/ND-CP taking effect on January 15, 2024.

Ho Quoc Tuan

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