Recently, the government has issued Decree No. 81/2020/ND-CP to amend and supplement a number of articles of Decree No. 163/2018/ND-CP dated December 4th, 2018 on the issuance of bonds. It is known that this Decree comes into force on September 1st, 2020 with the amended contents as follows:
About Bond Trading
Decree No. 81/2020/ND-CP amending Clause 8, Article 6 of Decree No. 163/2018/ND-CP as follows: “Trading of bonds: Corporate bonds issued in the domestic market are restricted trading within less than 100 investors excluding professional securities investors, within one year from the date of completion of the issuance, unless otherwise decided by the Court or inherited according to the provisions of law. After the time mentioned above, corporate bonds can be traded without limitation in terms of the number of investors, unless the issuing company decides otherwise. Corporate bonds issued to the international market comply with regulations on transactions in the issuing market”.
Regarding Bond Issuance Conditions
This Decree concurrently amends Clause 1 Article 10 of Decree No. 163/2018/ND-CP on the conditions that enterprises are allowed to issue bonds with respect to non-convertible bonds or bonds without securities. rights are as follows:
a) The issuing company is a joint stock company or a limited liability company established and operating under the laws of Vietnam.
b) Having a minimum operation period of 01 year from the date of first grant of an Enterprise Registration Certificate or Certificate of Business Registration or an equivalent License as prescribed by law. For reorganized or transformed enterprises, the duration of operation is counted as the operating time of the divided enterprise (in case of division), and the operation duration of the split enterprise (in the case of separation of enterprises), the longest operating time among the merged enterprises (in case of merger), the operating time of the merging enterprise (in case of merger), the the operating period of the business before and after the transformation (in the case of company conversion).
c) Having financial statements of the year preceding the year of issuance audited by a qualified auditing organization as prescribed in Clause 7, Article 4 of this Decree.
d) Sign an advisory contract with an advisory organization on bond issuance dossiers as prescribed in Clause 3, Article 15 of this Decree, unless the issuing company is an organization permitted to provide dossier consultancy services. preliminary issuance of bonds in accordance with the law.
đ) To ensure compliance with the limit on the number of investors when issuing and trading bonds as prescribed in Clause 2 Article 4 and Clause 8 Article 6 of this Decree.
e) Having a bond issue plan approved and approved by a competent authority as prescribed in Article 14 of this Decree.
g) To make full payment for both principal and interest of issued bonds in 03 consecutive years before the bond issue (if any).
h) Satisfying financial prudential ratios and safety ratios in operations in accordance with specialized laws.
i) To ensure that outstanding balance of corporate bonds privately issued at the time of issuance (including expected issuance volume) does not exceed 5 times of equity according to the latest quarterly financial statement at the time of issuance. Issuance approved by competent authorities.
k) Each issuance must be completed within 90 days from the date of information announcement prior to the release; The following issuance must be at least 6 months apart from the previous issue, and the bonds issued in one issuance must have the same terms and conditions.
l) Credit institutions that issue bonds are not required to meet the provisions of Points i and k of this Clause.
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