Vietnam: 02 requirements to be fulfilled when issuing convertible bonds or warrant-linked bonds

15:40, 01/01/2020

Recently, the State Bank of Vietnam has issued Circular No. 33/2019/TT-NHNN on amendments to Circular No. 34/2013/TT-NHNN dated December 31, 2013 of the Governor of the State Bank of Vietnam on domestic issuance of promissory notes, treasury bills, deposit certificates and bonds by credit institutions and foreign bank branches.

According to Clause 9 Article 1 of Circular No. 33/2019/TT-NHNN of the State Bank of Vietnam (SBV), if a credit institution wishes to issue convertible bonds or warrant-linked bonds, its bond issuance plan must include the contents about the conversion of bonds into shares or the right to purchase shares by holders of warrant-linked bonds. To be specific:

yeu cau phat hanh trai phieu chuyen doi, trai phieu kem chung quyen, Thong tu 33/2019/TT-NHNN

- Bond buyers must comply with law regulations on limits on contributed capital or purchased shares applicable at the time when they convert bonds for shares or purchase shares if holding warrant-linked bonds;

- The conversion of convertible bonds for shares or exercise of the right to purchase shares by holders of warrant-linked bonds shall be made after having obtained SBV's approval of its charter capital increase in accordance with SBV’s regulations on application and procedures for approval of charter capital increase by credit institutions.

Both the credit institution and holders of convertible bonds or warrant-linked bonds shall comply with SBV’s regulations on application and procedures for approval of charter capital increase by credit institutions when converting bonds for shares or exercising the right to purchase shares.

View full text at Circular No. 33/2019/TT-NHNN of the State Bank of Vietnam, effective from February 19, 2020.

Thu Ba

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