Conditions for bond offering in international market: Must fully pay debts in the last 03 consecutive years

According to Article 9 of the Decree No. 153/2020/NĐ-CP of the Vietnam’s Government, the provision that enterprise has fully paid principals and interests of bonds issued or due debts in the last 03 consecutive years preceding the bond offering is one of the conditions for bond offering. To be specific:

- In order to carry out the offering of non-convertible bonds without warrant (except the offering of bonds by securities companies or fund management companies that are not public companies), the issuer is required to meet the following requirements:

+ It is a joint-stock company or limited liability company duly established and operating in accordance with the law of Vietnam.

+ It has fully paid principals and interests of bonds issued or due debts in the last 03 consecutive years preceding the bond offering (if any), except the offering of bonds to creditors that are selected financial organizations.

+ It has maintained adequacy ratios and prudential ratios in operations in accordance with regulations of specialized laws.

+ It must have a bond issuance plan approved and accepted as prescribed in Article 13 hereon.

+ Its financial statements of the year preceding the year of issuance have been duly audited by an accredited audit organization according to regulations herein.

+ Entities participate in the offering according to Point a Clause 1 Article 8 hereof.

- In order to carry out the offering of non-convertible bonds without warrant, the securities companies or fund management companies that are not public companies shall meet the following requirements in Point a, Point c, Point dd and Point e Clause 1 of this Article.

- In order to carry out the offering of convertible bonds or warrant-linked bonds, the following requirements must be met:

+ The issuer is a joint-stock company.

+ Entities participate in the offering according to Point b Clause 1 Article 8 hereof.

+ The offering conditions in Point b, Point c, Point d and Point dd Clause 1 of this Article are satisfied.

+ There is an interval of at least 06 months between two private placements of convertible bonds or warrant-linked bonds.

+ The conversion of bonds into shares and execution of warrants must ensure the ratio of holding by foreign investors as prescribed by law.

Thus, depending on the type of bond (convertible or non-convertible, with warrants or without warrants), there are different offering conditions.

More details at the Decree No. 153/2020/NĐ-CP of the Vietnam’s Government, effective from January 01, 2021.

Le Thanh

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