Regulations on Debt Repayment on Behalf of the Guaranteed Entity in Vietnam

21:44, 11/07/2024

Recently, the Government of Vietnam issued Decree 92/2018/ND-CP replacing Decision 01/2013/QD-TTg on the management and use of the Accumulation Fund for Debt Repayment, addressing the issues, shortcomings, and ensuring risk management for on-lending and guarantees by the Government of Vietnam.

Decree 92/2018/ND-CP permits the guaranteed entities to receive debt repayment advances. The application of the Fund's capital advance for a guaranteed entity experiencing temporary or long-term financial difficulties and incapable of meeting its debt obligations on due loans or bond issuances guaranteed by the Government of Vietnam will be applied.

According to Decree 92, the guaranteed entity and its parent company (if any) must sign a compulsory loan contract with the Fund Management Agency and are responsible for fully and promptly repaying due debts to the Fund under the conditions stipulated in the capital advance contract signed with the Ministry of Finance.

In the event that the guaranteed entity faces difficulties and is unable to meet its due debt obligations to the Fund, based on the decision of the competent authority regarding debt rescheduling or extension for the guaranteed entity, the Fund Management Agency will sign a contract or agreement with the guaranteed entity regarding debt rescheduling or extension.

See more Decree 92/2018/ND-CP effective from July 1, 2018.

- Thanh Lam -

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