On 04, December 2018, the Government issued Decree No. 163/2018/ND-CP regulating the issuance of corporate bonds. This Decree takes effect from 01, February 2019.
Accordingly, Decree No.163/2018/ND-CP regulate conditions of issuance towards 02 type of bonds, specifically:
1. For non-convertible bonds or bonds not accompanied by warrants:
a) An issuing enterprise is a joint-stock company or limited liability company established and operating under Vietnamese law;
b) Having operated for at least 1 year from the date of the first issuance of enterprise registration certificates or business registration certificates or permits of equivalent value according to law provisions. For enterprises reorganized or transformed, split, consolidated or merged, their operation duration shall be calculated according to law provisions.
c) Having the annual financial statements of the preceding year of the issuing year audited by the qualified auditing organization according to the provisions of Clause 7, Article 4 of this Decree;
d) To ensure compliance with the limit on the number of investors when issuing and trading bonds according to the provisions of Clause 2, Article 4 and Clause 8, Article 6 of this Decree;
e) Having bond issuance plans already approved and approved by competent authorities according to the provisions of Article 14 of this Decree;
f) To make full payment of both principal and interest of the bonds already issued for 3 consecutive years before the issuance of bonds (if any);
g) Satisfaction of financial safety ratios and safety assurance ratios in operation according to the provisions of specialized law.
2. For the issuance of convertible bonds or warrant-linked bonds:
a) An issuing enterprise is a joint-stock company;
b) Satisfying the issuance conditions specified at Points b, c, d, e, g and g, Clause 1 of this Article;
c) Satisfying the provisions on the ownership ratio of foreign investors in accordance with the provisions of law in case of conversion of bonds into shares or exercising the right of purchase of warrants;
d) The issuance of convertible bonds must be at least six months apart;
e) Convertible bonds, bond certificates issued together with bonds must not be transferred for at least one year from the date of completion of the issuance, except for transfer to or transfer between securities investors. or by court decision or inheritance in accordance with the law.
In summary, the issuance Decree No.163/2018/ND-CP on issuance corporate bonds created basis legal frame in the issuance of corporate bonds. By that, protect the rights and interests of individuals and organizations to buy bonds fully, minimizing risks.