Regulations on basic conditions and terms of bonds according to Vietnamese law

1. Regulations on basic conditions and terms of bonds

Pursuant to Article 6 of Decree 153/2020/ND-CP stipulates as follows:

– Bond term: decided by the issuing enterprise for each offering based on the enterprise’s need to use capital.

– Issuance volume: decided by the enterprise. The issuing company decides on each offering based on the capital use needs of the business.

– Bond issuance and payment currency

+ For bonds offered for sale in the domestic market, the currency of issuance, interest payment, and bond principal is Vietnamese Dong.

+ For bonds offered for sale in the international market, the currency of issuance and payment Bond interest and principal payments are in foreign currency according to regulations in the issuing market and comply with the provisions of law on foreign exchange management.

– Bond par value

+ Bonds offered for sale in the domestic market, face value is one hundred thousand (100,000) Vietnamese Dong or a multiple of one hundred thousand (100,000) Vietnamese Dong Nam.

+ Bonds are offered for sale to the international market, face value complies with regulations in the issuing market.

– Form of bond

+ Bonds are offered in the form of certificates, book entries or electronic data.

+ The issuing enterprise decides specifically on the form of bond for each tranche offered for sale according to regulations in the issuing market.

– Bond nominal interest rate

+ Bond nominal interest rate can be determined by one of the following methods: fixed interest rate for the entire bond term; floating interest rate; or a combination of fixed and floating interest rates.

+ In case the nominal interest rate is a floating interest rate or a combination of fixed and floating interest rates, the issuing enterprise must specifically state the reference basis to determine the nominal interest rate in the issuance plan and disclose information to investors buying bonds about the reference basis used.

+ The issuing enterprise decides the nominal interest rate for each offering in accordance with its financial situation and debt repayment ability. Interest rates on bonds issued by credit institutions, in addition to complying with the provisions of this Decree, must be consistent with the regulations on interest rates of the State Bank of Vietnam.

– The type of bond is decided by the issuing enterprise according to the provisions of law.

– The method of payment of interest and principal of bonds is decided by the issuing enterprise based on the need to use capital and issuance market practices to announce to the public. investors before offering bonds.

2. Regulations on information disclosure principles of bond issuance 

Pursuant to Article 18 of Decree 153/2020/ND-CP stipulating the information disclosure principles as follows:

“1. Bond-issuing enterprises are responsible for fully and promptly disclosing information to investors; the information must be clear according to the provisions of this Decree and guidance of the Ministry of Finance. Issuing enterprises must be responsible before the law for the content, accuracy and truthfulness of the disclosed information.

2. Information disclosure before the bond offering must not contain advertising or solicitation content and must not be through the mass media, except in cases of information disclosure in accordance with the law on information disclosure on the stock market. securities.

3. The issuing enterprise is a public company that discloses information in accordance with the provisions of this Decree and the provisions of law on information disclosure on the stock market.”

3. Does the law stipulate a minimum or maximum interest rate for corporate bonds?

(1) Pursuant to Article 20 of Decree 153/2020/ND-CP stipulates as follows:

“Article 20. Disclosure of information about bond offering results

1. Within 10 days from the date of completion of the bond offering, the enterprise shall disclose information about the results of the offering to bond-owning investors and send public information Information disclosure to the Stock Exchange. The content of information disclosure shall comply with the guidance of the Ministry of Finance.

2. The Stock Exchange receives information published on bond offering results according to the provisions of Clause 1 of this Article to synthesize and publish information on the corporate bond information page according to the provisions of Clause 2, Article 32 of this Decree and report on the situation of corporate bond issuance according to the provisions of Article 33 of this Decree.”

(2) Pursuant to Appendix II Disclosure of information about bond offering results issued with Circular No. 122/2020/TT-BTC stipulates as follows:

– Information about the enterprise

+ Enterprise name:

+ Head office address, phone number, transaction fax number, email address element:

+ Type of business:

+ Main fields of activity:

– Bond code (Principles for bond coding follow the instructions of the Hanoi Stock Exchange):

– Conditions and terms of bonds:

+ Volume of bonds issued (detailed number of bonds and face value):

+ Term:

+ Bond type:

+ Bond form:

+ Nominal interest rate and interest payment term:

+ Real issuance interest rate International:

– Issuance date and maturity date:

– Issuance purpose:

– Issuance method:

– Payment method for bond principal and interest:

– Rights of investors owning bonds:

– Method of exercising rights (in case of issuing convertible bonds, issuing bonds with warrants):

+ Rights attached to bonds;

+ Conditions and time for exercising rights;

+ Conversion rate and method of calculating purchase and/or conversion price;

+ Method of calculation and method of compensation for losses damages in case of failure to exercise rights;

+ Other terms related to the rights of warrant holders.

– Commitment to guarantee (in case of issuing secured bonds)

+ Form of guarantee (guarantee to pay all or part of interest and principal when due using the assets of the issuing enterprise or the assets of a third party according to provisions of law on secured transactions; or guaranteed payment according to the provisions of law);

+ Collateral (list detailed assets, asset value, name of valuation organization, calculation method, insurance contract, if any…);

+ …..

– Buy back bonds before maturity, exchange bonds.

Thus, the law does not limit bond interest rates but will be determined by the business The business decides in accordance with its financial situation and ability to repay debt.