Provisions on fundamental terms and conditions of bonds in Vietnam

According to Article 6 of the Decree No. 153/2020/NĐ-CP of the Vietnam’s Government, fundamental terms and conditions of bonds are specified as follows:

- Bond term: decided by the issuer in each offering based on its demands for funds.

- Quantity of bonds issued: decided by the issuer in each offering based on its demands for funds.

- Currency used in issuance and payment for bonds

+ The currency used in issuance and payment of bond principals and interests of bonds offered in the domestic market is Vietnamese dong (VND).

+ The currency used in issuance and payment of bond principals and interests of bonds offered in the international market is a foreign currency according to regulations adopted in the issuing market and regulations on foreign exchange management.

- Face value:

+ Face value of a bond offered in the domestic market is VND 100.000 (one hundred thousand) or a multiple of VND 100.000 (one hundred thousand).

+ Face value of a bond offered in the international market shall comply with regulations adopted in the issuing market.

- Bond form:

+ Bonds are offered in the forms of certificates, book entries or electronic data;

+ The form of bond in each offering shall be decided by the issuer according to regulations adopted in the issuing market.

- Coupon rate:

+ The coupon rate of a bond may be the fixed interest rate over its entire term, floating interest rate or a combination of these two interest rates.

+ If the coupon rate is the floating interest rate or combination of the fixed interest rate and floating interest rate, the issuer shall indicate the reference rate which is used as the basis for determining the floating interest rate in the bond issuance plan and also notify it to bond buyers.

+ The issuer shall decide the coupon rate in each bond offering in conformity with its financial health and repayment capacity. In addition to the provisions herein, the coupon rate of bonds issued by a credit institution must also comply with regulations on interest rates adopted by the State Bank of Vietnam.

- The bond types shall be decided by the issuer in accordance with regulations of law.

- The method of principal and interest payment shall be decided by the issuer based on its demand for funds and the practices of the issuing market, and shall be notified to investors before the bond offering.

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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