On December 04, 2018, the Government issued Decree No. 163/2018/ND-CP regarding bond issuance of enterprises. This decree comes into effect from February 01, 2019.
Accordingly, the Decree stipulates several new and important regulation regarding conditions on bond issuance of enterprises, in particular:
Enterprises must have the minimum operation period of 01 year from the first issuance date of Enterprise Registration Certificate or that of Business Registration Certificate or that of equivalent License in accordance with laws.
Bonds must be issued to no more than 100 investors, regardless of professional securities investors and must not be under mass media or Internet.
Enterprises only need financial statement of the previous year audited by qualified auditing organizations instead of having profits in the preceding year from issuance.
Enterprises must make full payments of both principal debt and interest for a period of 03 consecutive years prior to the issuance of bonds
Enterprise are obliged to public information about bond issuance before issuance date, after issuance date, before converting bond, or redemption immature bond.
Bonds are one of the effective capital mobilization tools of enterprises, especially in the context that the current banking system is tightening credit loans, therefore, the introduction of this Decree significantly contributes to create a more open legal framework for enterprises that need to mobilize capital through bonds, while this Decree still protects the interests of investors through the mechanism of information disclosure and bond depository at the Stock Exchange.