What to do for the healthy and sustainable development of the corporate bond market?

Nội dung bài viết

In recent years, intending to raise capital, issuing bonds has become an effective way for businesses in the circumstance that middle-term and long-term credit of banks are narrowed, and banks have decreased the percent of short-term capital for middle-term and long-term loans step by step.

The size of the corporate bonds market increased from 4,9% GDP to 16,6% GDP in 2021.

However, in reality, many businesses are issuing high-yield bonds double the interest of the deposit. Businesses have used funds in production and investment, but much risk is involved.

In context, Nguoi Lao Dong Paper had organized a seminar having the topic "Sustainable development of the corporate bond market" so that the expert, businesses, and organizations… discussed comprehensive measures leading to improving the corporate bond market, becoming an adequate raising capital. According to Resolution No.54/NQ-CP issuing the Government's action program to implement the National Assembly's resolution on the economic restructuring plan for 2021-2025, the outstanding debt of corporate bond reachs about 20% GDP.

The seminar took place at 8h30 AM, April 19 online and offline at Foor 2, Nguoi lao Dong paper's headquarter, address 127 Vo Van Tan, Vo Thi Sau, District 3, HCMC.

Companion: Rong Viet Securities Company


1. Dr. Can Van Luc – Member of the National Financial – Monetary Policy Advisory Council;

2. Assoc. Prof. – Dr. Dinh Trong Thinh, economic expert;

3. Mr. Nguyen Duc Lenh, Deputy Director of State Bank of Vietnam, Ho Chi Minh City branch;

4. Dr. Le Dat Chi - University of Economics Ho Chi Minh City;

5. Master Nguyen Anh Vu - Banking university of Ho Chi Minh City;

6. Dr. Le Anh Tuan - Equity Investment Director of Capital Fund;

7. Lawyer Nguyen Thanh Ha - The chairman of SBLaw Law Firm;

8. Mr. Huynh Anh Tuan - General Director of Dong A Bank Securities Company;

9. Mr. Phung Xuan Minh - General Director of Sai Gon Phat Thinh Raiting Joint stock company (Saigon Raiting);

10. Mr. Truong Quoc Binh - Deputy General of Saigon Raiting;

11. Mr. Tran Huy Doan - Deputy Investment Department of ACBS Securities Company.

Mr. Nguyen Thanh Ha took part in seminar and had an important essay:

Question 1: What is your opinion about "unclear" corporate bond which raised and some disadvantages for businesses, for investors? Are there any problems about raising corporate bonds?


Accessing banking loans is more complex, especially in real estate, businesses use bonds. Investors raise money quickly in order to finish a project, however they purchase other projects or buy shares of another company in reality.

The number of bonds, aimed at this community of individual investors can reach hundreds of thousands of billions VND. In case, businesses use the capital for the wrong purpose, leading to the inability to repay the debt, individual investors will be in danger.

Capital mobilization, in the form of bank deposits, is carried out under the strict supervision mechanism of the State Bank. Meanwhile, capital mobilization from bonds, distributed by banks and securities companies to individual investors, is subject to very loose supervision. If this is a factor leading to ineffective inadequate debt control, the risk will shift to individual investors

         Despite the high rate of secured bonds, the quality of collateral is property formed in the future or stock of enterprises. This property is not valued accurately or fluctuates sharply; whenever the real estate market or stock market has changed, collateral may not be enough to pay debt, interest bonds. In addition, the collateral of corporate bonds may secure other debts, issue other bonds. As a result, investors need to consider withdraws.

According to clause 7 Article 6 of Decree No.153/ND-CP prescribing private placement and trading of privately placed corporate bonds in the domestic market and offering corporate bonds in the international market, the bond types shall be decided by the issuer. According to rules for issuance of bonds and use of raised funds (Article 5), enterprises raise capital for individual bonds based on the principle: self-borrowing, self-paying, self-responsibility and the state manager does not issue issuance permits.

To sum up, there are some problems in The Law on Securities 2019, Decree No.153/ND-CP prescribing individual corporate bonds without secured or low-quality secured properties.

Question 2: People said that the managed agencies need to monitor, post-check capital's enterprises, funding goals, the process of projects so as to control the corporate bonds market. What is your opinion?


In order to control the corporate bond market, the management agencies need to monitor and post-check the capital flow of the enterprise mobilized after issuance, the purpose of capital use, the project implementation process, etc. Bond issuers and corporate bond investors also need to take measures to limit risks as follows:

Investors should be careful when investing in corporate bonds:

- The Law on Securities, the Law on Enterprises and the Decrees on corporate bond issuance stipulate that only professional securities investors can buy and trade privately issued corporate bonds. Therefore, before considering whether to buy individual corporate bonds or not, investors need to study the regulations on conditions, supporting documents and regulations on penalties for violations for professional securities investors.

- when being introduced to buy individual corporate bonds, investors need to request the issuer or the distributing organization to provide complete and accurate information about the issuer's financial position, including the situation of bond capital mobilization (number of issues, payment of interest and principal of issued bonds) and criteria for assessing the ability of bonds to be issued, debt payment of the enterprise (liabilities to equity ratio, solvency ratio for short-term, long-term debts, inventory turnover ratio…).

- Investors need to know the characteristics of bonds, the rights and obligations of bondholders, commitments to bonds, obligations of the issuer, and obligations of the distribution organization to the bond. with bonds. In addition, after buying bonds, investors need to regularly update on the financial situation, debt repayment capacity of the issuing enterprise and whether the use of capital raised from bonds is suitable for issuing bonds.

- Investors should note that the fact that credit institutions and securities companies distribute corporate bonds does not mean that these organizations guarantee the safety of buying bonds. These organizations are only service providers, enjoying service fees from the issuer but are not responsible for the appraisal/assessment of the issuer's financial situation and debt repayment ability, therefore, it is not responsible for whether the enterprise will repay the principal and interest of the bond at maturity. The risk of bonds is still the risk of the issuer.

Issues need to be honest when disclosing information and using mobilized capital:

For enterprises that mobilize corporate bonds in large volumes, with high interest rates exceeding their financial capacity, it is risky when production and business activities face difficulties, the enterprise will not be able to pay bond principal and interest according to bond commitments. Issuing businesses should not that violating regulations on information disclosure, using capital for improper purposes as announced, in addition to being handled for violations according to regulations, may be prosecuted for criminal liability if causing damage and harm to investors/

In addition, investors and bond issues, service providers need to comply with law in providing complete, transparent and accurate information to investors, ensuring advice to the issuer complies with the law; identify the right professional investors to buy bonds.

Question 3: Which way that corporate bonds market develop steady, contribute to middle-term, long-term mobilization capital channel.


With the aim of developing steady corporate bonds market, contribute to the middle-term, long-term mobilization capital channel, there are some measures need to be taken:

Firstly, the system of law management and supervision of the corporate bond market must be completed.

- Focusing on implementing legal documents, improving the institution of operation, especially control of the market. Researching, editing legal corridors in order to govern people, involved: investors, issuers, financial intermediary, credit rating organizations, the manage agencies who is transparent financial information, in compliance with law and international terms.

- Reviewing and evaluating policies on issuing, trading, providing corporate bond services, improving the legal frame of issuing corporate bond by public and individual ways. For public ways, credit rating, trading on stock market is compulsory. For individual way, issuers and traders are professional securities investors.

- Increasingly monitoring the release, investment, trading of corporate bonds, and auditing whether law is applied or not.

- educating law on issuing corporate bonds, information about the corporate bond market and encouraging investors, corporate bond market service organizations. On media, the manage agencies usually provide information about corporate bonds, encourage issued company to apply law, investors need to consider corporate bonds' disadvantages/

Secondly, secondary market is established for privately issued corporate bonds:

Secondly, bond market is bonds traded by investors, issued on the primary market and traded directly or via an intermediary. The formation of a secondary trading market organization for privately-issued corporate bonds is important factor in enhancing the liquidity of privately-issued corporate bonds, as well as helping the market to have information about bond trading after issuance, helping businesses have more transparent and effective capital mobilization channel, thereby contributing to the better stock market. When investors own corporate bonds, investors can use them to mortgage, pledge, guarantee for loan activities, trade on the secondary market.

Thirdly, build a credit rating system for businesses:

According to international information, the corporate bond market needs the participation of corporate valuation and credit rating organizations to increase the quality of bonds traded on the market. The organization that conducts business valuation and credit rating must have prestige, high-quality personnel, classified products, and credit assessment. In the current Vietnamese predecessor, the immediate solution is a joint venture and association with foreign organizations to establish a domestic organization. Focusing on establishing 1-2 businesses is the premise for the credit rating company to be born.

Before a corporate credit rating agency is established and operates stably, the corporate bond information page needs to be focused and updated to provide investors with information about privately issued corporate bonds. The corporate bond information page will publish information on the essential contents of all private placements of corporate bonds by private issuers to serve the demand for information of all types of investors, as well as for statistical and reporting purposes.

Question 4: Decree 153 on offering and trading corporate bonds is being amended and supplemented. According to you, what points need to be amended and supplemented in this Decree in order to close the "gap" and contribute to the healthy and sustainable development of the bond market?


It is necessary to supplement and amend Decree 153/2020/ND-CP in several directions, such as amending regulations on the purpose of bond issuance to strengthen the issuer's responsibilities and obligations in the use of money proceeds from the issuance of bonds for the proper purposes.

Firstly, it is necessary to add regulations on credit ratings for some types of issued bonds to increase publicity and transparency, contributing to improving the quality of issued bonds. At the same time help, the market has a habit of being accustomed to using credit rating results to assess the risks of bonds, approaching international practices, and limiting risks for investors.

Secondly, it is necessary to supplement the regulation on the representative of bondholders to strengthen the supervision of the purpose of using the bond capital of the issuer, as well as strengthen supervision of the implementation of other commitments of the issuer; how to identify professional securities investors who are allowed to invest in and trade privately issued corporate bonds.

Thirdly, supplementing regulations to accelerate the establishment of a private corporate bond trading market at the Stock Exchange for professional securities investors in order to increase liquidity and at the same time enhance publicity, transparency, strengthening management and supervision of bonds put into trading on the secondary market.

In addition, it is necessary to amend several regulations on the time and content of information disclosure in order to overcome recent shortcomings and, at the same time, increase the transparency of the bond issuer and the use of the bond issuer's capital.

Moreover, supplementing the guiding document for the implementation of Decree 153/2020/ND-CP because currently only Circular 16/2021/TT-NHNN stipulates credit institutions and bank branches. Foreign buyers and sellers of corporate bonds.


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