On September 16th 2022, the Government issued Decree No. 65/2022/ND-CP on amending a number of articles of Decree No. 153/2020/ND-CP dated December 31, 2020 on prescribing private placement and trading of privately placed corporate bonds in domestic market and offering of corporate bonds in international market. Decree No. 65/2022/ND-CP shall be effective from 16th September 2022. 

Major amendments of this Decree are summarized as follows:

1. Purposes of bonds issuance (Amendment to Clause 2 of Article 5, Decree No. 153/2020/ND-CP) 

Bonds are issued for executing investment programs and projects, restructuring the issuer’s debts or serving other purposes prescribed in specialized laws. 

The bond issuance purposes must be specified in the issuer’s bond issuance plan and disclosed to investors registering for purchase of bonds. The funds raised from a bond issue must be used for the purposes specified in the issuer’s bond issuance plan and notified to investors.

(In accordance with the previous regulations, bonds are issued for executing investment projects/programs; increasing working capital; restructuring the issuer’s funding sources or serving other purposes prescribed in specialized laws.)

2. Rules for issuance of bonds (Supplement to Clause 4 and 5 of Article 5, Decree No. 153/2020/ND-CP)

Decree No. 65/2022/ND-CP has supplemented the following rules for bond issuance:

- For bonds issued in the domestic market, corporate issuers are only allowed to modify the conditions and terms of bonds specified in Article 6 of this Decree when satisfying the following provisions:

a. Approved by the competent authority of the corporate issuers;

b. Approved by the number of bondholders representing 65% of the total number of bonds outstanding of the same type or more;

-  Information on changes in conditions and terms of bonds must be disclosed by the corporate issuers as prescribed in Article 22 of this Decree.

3. Face value (Amendment to Point a, Clause 4 of Article 6, Decree No. 153/2020/ND-CP)

a. Face value of a bond offered in the domestic market is VND 100,000,000 (one hundred million) or a multiple of VND 100,000,000 (one hundred million).

(Previously, face value of a bond offered in the domestic market is VND 100,000 (one hundred thousand) or a multiple of VND 100,000 (one hundred thousand)). 

4. Professional securities investors (Supplementing to Point c, d, Clause 1 of Article 8, Decree No. 153/2020/ND-CP)

Decree No. 65/2022/ND-CP provides guidance on determining professional investors as parties allowed to invest and trade privately placed corporate bonds, specifically:

- Professional investors are those with financial capacity or professional qualifications in securities as prescribed in Article 11 of the Law on Securities. Organizations in charge of identifying professional investors shall comply with the provisions of Articles 4 and 5 of the Government's Decree No. 155/2020/ND-CP dated December 31, 2020 detailing the implementation of a number of articles of the Securities Law and amended documents, supplement and replacing (hereinafter referred to as Decree No. 155/2020/ND-CP), except for the identification of professional investors specified at Point d of this Clause.

- Individual/retail Investors are qualified as Professional investors, as prescribed at Point d, Clause 1, Article 11 of the Law on Securities, if their portfolio of listed and registered securities has a value of at least VND 02 billion determined by its average market value for a period of at least 180 days immediately preceding the date of determination of professional investor status, excluding the value of margin trading and the value of resale securities. The identification of a professional securities investor is valid within 03 months from the date of confirmation.

5. Representatives of bond holders (Supplement to Clause 7 of Article 14, Decree No. 153/2020/ND-CP)

Decree No. 65/2022/ND-CP supplemented regulations on representatives of bondholders to enhance the monitoring on the uses of funds from corporate bond issuance and performances of other commitments/debt covenants of corporate issuers. 

Accordingly, representatives of bondholders must report to State Securities Commission of Vietnam (SSC), Stock exchange quarterly, yearly and in case of breach that causes harm to bondholders’ benefits.

When providing services, representatives of bondholders are obliged to adhere to Law on Securities and provisions of Article 24 of decree No. 155/2020/ND-CP. In case of violation of the provisions of law, penalties will be determined in accordance with prevailing regulations on administrative violations in the field of securities and securities market.

6. Early bond redemption and bond swaps (Amendment and supplement to Article 7 of Decree No. 153/2020/ND-CP)

Accordingly, the early bond redemption, bond swap is promulgated as below: 

- The issuer is entitled to redeem bonds before maturity or conduct a bond swap. The redemption of bonds offered in the international market before maturity must comply with SBV’s regulations on foreign exchange management. Bonds must be disposed of after redemption. 

- The entity competent to approve the bond issuance plan shall have the power to approve the plan for redemption of bonds before maturity or bond swap, except for the case of required early repurchase of bonds as prescribed at Point b, Clause 3 of this Article.

Cases of early redemption of bonds include:

a) Early redemption in accordance with the agreement between the issuer and the bond owner.

b) Compulsory repurchase at the request of the investor when:

- The corporate issuer violates the law on offering and trading corporate bonds according to the decision of the competent authority, but such violation cannot be remedied, or the remedy is not approved by the number of bond holders representing 65% of the total number of bonds of the same type in circulation or more.

- The corporate issuer violates the bond issuance plan but the violation cannot be remedied or the remedy is not approved by the number of bond holders representing 65% of the total number of bonds of the same type in circulation or more.

- Other cases are specified in the bond issuance plan specified in Article 13 of this Decree (if any).

7. Supplementing provisions on bond offering dossier (Amending Clause 2, 3, 4 of Article 12, Decree No. 153/2020/ND-CP)

In terms of bond offering dossier, corporate issuers are required to provide rating results given by credit rating agencies in two following cases in accordance with Clause 2, Article 19 and Clause 3, Article 310 of Decree No. 155/2020/ND-CP.

- The total value of bonds at their face value raised in every 12 months exceed 500 billion VND and exceed 50% of the equity based on the latest annual financial statement that is audited (or examined half-year financial statement if the issuer is required to disclose the examined half-year financial statement) by an accredited audit organization; or

- The bond outstanding at face value on the offering registration date exceed 100% of the equity based on the latest annual financial statement that is audited (or examined half-year financial statement if the issuer is required to disclose the examined half-year financial statement) by an accredited audit organization.

- In accordance with Clause 3, Article 310, Decree No. 155/2020/ND-CP, the regulations of Clause 2 Article 19 of this Decree will be applied after 02 years from the effective date of this Decree. As Decree No. 55/2020/ND-CP takes effective from 1st January 2021, this regulation related to credit rating results shall be effective from 1st January 2023.  

8. Amending the disclosure of information on bond offering results (Amending, supplementing Clause 1, Article 20 and Clause 2, Article 21, Decree No. 153/2020/ND-CP)

Decree No. 65/2022/ND-CP amends several provisions on the disclosure of information on bond offering results. To specify, the issuer shall disclose information on offering results to bondholders and send the disclosed information to the Stock Exchange within 5 working days (reducing from 10 working days as the previous regulation). The information to be disclosed shall comply with guidelines given by Ministry of Finance.  In case corporate issuers fail to offer their bonds or cancel their bond offerings, the issuer shall disclose information and send the disclosed information to the Stock Exchange within 05 working days.  

The Decree also supplements the scope of disclosed information stipulated at Clause 2, Article 21 of Decree No. 153/2020/ND-CP, including:

- In case the corporate issuer is a parent company, the issuer shall disclose financial statements of the parent company (separate financial statements) and the consolidated financial statements. 

- Half-year and annual reports on the use of funds raised from the bond issuance for outstanding bonds. Those reports shall be reviewed or audited by an accredited audit organization. 

- Reports on the corporate issuers’ compliance with debt covenants to bondholders.

View full details of the Decree: https://vbma.org.vn/en/regulatory-framework/legal-documents