Local investment and development funds operating for at least 1 year may offer private bonds in Vietnam

According to the Decree No. 147/2020/NĐ-CP of the Vietnam Government, the local investment and development fund issues bonds in a separate form in the domestic market on the principle of self-borrowing, self-paying, self-responsibility for the efficiency of capital use and debt repayment ability. Conditions for private placement of bonds of the local investment and development fund are as following:

- The Fund has a minimum operation period of 01 year from the date the Provincial People's Committee issues the Decision on establishment of the Fund.

- The Fund has been assessed and classified by the People's Committee of the province for effective operation in the year preceding the year of issuance in accordance with the provisions of this Decree and the guidance of the Ministry of Finance of Vietnam.

- Ensure compliance with regulations on investors purchasing and trading individual corporate bonds in accordance with the law on private placement of corporate bonds.

- There is a separate bond issuance plan approved by the provincial People's Committee, specifying the purpose of using capital from the bond issuance and the source of arrangement for repayment of bond principal and interest upon maturity.

- Make full payment of both principal and interest of issued bonds or pay all due debts for 03 consecutive years before the bond issuance (if any), except for the case of bond issuance to bondholders. debt is the financial institution of choice.

- Meeting the investment, lending and capital mobilization limits prescribed in this Decree.

Note: Basic conditions and terms of bonds, subjects to buy and trade bonds, process, dossiers, issuance plan, issuance method, bond registration and depository, disclosure of actual information comply with the law on private placement and trading of corporate bonds in the domestic market.

More details at the Decree No. 147/2020/NĐ-CP of the Vietnam Government, effective from February 05, 2021.

Ty Na

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