On September 16, 2022, Vietnam published Decree 65/2022/ND-CP amending Decree 153/2020/ND-CP governing the offering and trading of privately placed corporate bonds in the domestic market, as well as the issuance of corporate bonds to the foreign market.
The following are some of the highlights of Decree 65/2022/ND-CP:
Changes to the purpose of bond issuing
Bond issuance is used to fund investment plans and projects, restructure the enterprise's debt, or issue bonds in compliance with the law.
The business must determine the purpose of the offering in the issuance plan and provide information to investors who register to purchase bonds. The enterprise's use of capital raised via the issuing of bonds must ensure that it is used for the right purposes in accordance with the issuance plan and information given to investors.
Supplementing the bond issuance principle
The following bond issuance principles have been supplemented to Decree 65/2022/ND-CP:
Businesses may only amend the conditions and terms of bonds stipulated in Article 6 of Decree 65/2022/ND-CP for bonds already issued in the domestic market provided when complying with the following regulations:
- Approved by a competent authority of the issuing enterprise;
- Approved by bondholders representing 65% or more of the total number of bonds of the same type in circulation.
Information on the change of conditions and terms of bonds must be unusually disclosed by the issuer according to the provisions of Article 22 of Decree 65/2022/ND-CP.
Amendment of regulations on bond redemption before maturity and bond swap
The repurchase of bonds before maturity and the swap of bonds are regulated as follows:
The issuer may redeem or swap bonds before maturity. Particularly for early redemption of bonds offered for sale in the international market, the implementation must comply with regulations on foreign exchange management of the State Bank of Vietnam. Bonds are canceled after being redeemed.
Organizations and individuals competent to approve and approve bond issuance plans are the competent authorities to approve and approve plans for early bond redemption or bond swap, except for the case of compulsory redemption of bonds before maturity as prescribed at point b, clause 3, Article 7 of Decree 65/2022/ND-CP.
Originally published OCTOBER 14, 2022.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.