Procedures for offering of bonds in international market in Vietnam

Procedures for offering of bonds in international market in Vietnam (Internet image)

Regarding this issue, LawNet would like to answer as follows:

1. Rules of offering of bonds in international market in Vietnam

According to Article 24 of Decree 153/2020/ND-CP, the rules of offering of bonds in international market are as follows:

- Any enterprise performing offering of bonds in the international market (whether private placement or public offering) must comply with regulations of Decree 153/2020/ND-CP and meet offering conditions according to regulations adopted in the issuing market.

- Trading of corporate bonds offered in the international market shall comply with regulations adopted in the issuing market.

2. Conditions for offering of bonds in international market in Vietnam

Conditions for offering of bonds in international market according to Article 25 of Decree 153/2020/ND-CP are as follows:

- With regard to non-convertible bonds without warrant:

+ The issuer must be a joint-stock company or limited liability company duly established and operating in accordance with the law of Vietnam;

+ The plan for issuance of bonds in the international market must have been approved and accepted by a competent authority as prescribed in Article 28 of Decree 153/2020/ND-CP;

+ It has maintained adequacy ratios and prudential ratios in operations in accordance with regulations of specialized laws;

+ It complies with regulations on management of enterprises’ borrowing and repayment of foreign debts which are not guaranteed by the Government, and regulations on foreign exchange management;

+ It meets the offering conditions according to regulations adopted in the issuing market.

- With regard to convertible bonds or warrant-linked bonds:

+ The issuer must be a joint-stock company that meets the conditions laid down in Clause 1 of Article 25 of Decree 153/2020/ND-CP;

+ The conversion of bonds into shares and execution of warrants must ensure the ratio of holding by foreign investors as prescribed by law;

+ There is an interval of at least 06 months between two offerings of convertible bonds or warrant-linked bonds.

3. Procedures for offering of bonds in international market in Vietnam

According to Article 26 of Decree 153/2020/ND-CP. the procedures for offering of bonds in international market are as follows:

-  With regard to the offering of bonds in the international market by a company other than a public company:

+ The issuer shall prepare a bond offering dossier as prescribed in Article 27 of Decree 153/2020/ND-CP and organize the offering in the issuing market.

+ The issuer shall disclose information according to Articles 29, 30 and 31 of Decree 153/2020/ND-CP and regulations adopted in the issuing market.

- With regard to the offering of bonds in the international market by a public company, securities company or fund management company:

+ The issuer shall prepare a bond offering dossier as prescribed in Article 27 of Decree 153/2020/ND-CP and send it to SSC. Within 10 days from the receipt of adequate and valid dossier, SSC shall give its written approval. If a dossier is refused, SSC shall give a written response in which reasons for such refusal must be specified.

+ After obtaining the approval from SSC, the issuer shall disclose information before offering according to Article 29 of Decree 153/2020/ND-CP and organize the offering according to regulations adopted in the issuing market.

+ Within 10 days from the completion date of the bond offering, the issuer shall submit a report on offering results, made according to the form in Appendix IV enclosed with Decree 153/2020/ND-CP, to SSC.

Appendix IV

- The issuer shall make bond principal and interest payments, and disclose information according to regulations adopted in the issuing market and Section 2 Chapter III of Decree 153/2020/ND-CP.

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