Requirements for issuance of non-convertible bonds in Vietnam from February 01, 2019

According to Clause 3 Article 1 of Decree No. 81/2020/NĐ-CP of Vietnam’s Government amending Clause 1 Article 10 of Decree No. 163/2018/NĐ-CP on requirements for issuance of non-convertible bonds or bonds without warrants:

- The issuer must be a joint-stock company or limited liability company that has been duly established and is operating in accordance with the law of Vietnam.

- It has been operating for a period of at least 01 year from the date of initial issuance of enterprise registration certificate or business registration certificate or another license of equivalent validity as regulated by law.  With regard to a reorganized or converted enterprise, its operating period shall be the operating period of the transferor enterprise (in case of full or partial division of enterprise), or the longest period among operating periods of the consolidating enterprises (in case of consolidation of enterprises), or the operating period of the acquirer enterprise (in case of acquisition of enterprises), or total operating period of the enterprise before and after its conversion (in case of conversion of form of enterprise).

- Its financial statements of the year preceding the year of issuance have been duly audited by an accredited audit organization as prescribed in Clause 7 Article 4 of this Decree.

- It has signed a consulting contract with a consultancy organization providing consultancy on bond issuance dossiers as prescribed in Clause 3 Article 15 hereof, unless the issuer is licensed to provide consultancy on bond issuance dossiers as prescribed by law.

- It must comply with the limitations on the number of investors upon issuance and transaction of bonds as prescribed in Clause 2 Article 4 and Clause 8 Article 6 of this Decree.

- It must have a plan for bond issuance approved and accepted by a competent authority as prescribed in Article 14 of this Decree.

- It has fully paid principal and interest amounts of any bonds issued in the last 03 consecutive years preceding the bond issue.

- It has maintained prudential ratios and operation safety ratios in accordance with regulations of specialized laws.

- Total outstanding debt on corporate bonds issued through the private placement at the time of issuance (including the planned amount of bonds to be issued) does not exceed 05 times the owner's equity stated in the financial statements of the latest quarter preceding the time of issuance approved by a competent authority.

- Each bond issue must be completed within 90 days from the date of publishing of information before the bond issue; the interval between two issues must be at least 06 months; bonds issued in an issue must have the same terms and conditions.

- Credit institutions issuing bonds are not required to satisfy the requirements laid down in Point i and Point k of this Clause.

View details at: Decree No. 81/2020/NĐ-CP of Vietnam’s Government takes effect from September 01, 2020.

Thu Ba

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