What are regulations on face value of a bond offered in the Vietnam market in 2023? - Question from Hanh Nhung (Long An).
Pursuant to Clause 4 Article 6 of the Decree 153/2020/NĐ-CP (amended by Clause 4 Article 1 of the Decree 65/2022/NĐ-CP) stipulating ace value of a bond offered in the domestic market in Vietnam in 2023 as follows:
Fundamental terms and conditions of bonds
1. Bond term: decided by the issuer in each offering based on its demands for funds.
2. Quantity of bonds issued: decided by the issuer in each offering based on its demands for funds.
3. Currency used in issuance and payment for bonds
a) The currency used in issuance and payment of bond principals and interests of bonds offered in the domestic market is Vietnamese dong (VND).
b) The currency used in issuance and payment of bond principals and interests of bonds offered in the international market is a foreign currency according to regulations adopted in the issuing market and regulations on foreign exchange management.
4. Face value:
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).
b) Face value of a bond offered in the international market shall comply with regulations adopted in the issuing market.
Pursuant to Clause 2 Article 1 of the Decree 153/2020/NĐ-CP stipulating as follows:
1. This Decree deals with the private placement and trading of privately placed corporate bonds in the territory of the Socialist Republic of Vietnam and the offering of corporate bonds in international market.
2. This Decree shall not apply to the public offering and trading of corporate bonds in the domestic market in accordance with the Law on Securities No. 54/2019/QH14.
As regulations above, 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).
Note: This Decree shall not apply to the public offering and trading of corporate bonds in the domestic market.
Pursuant to Clause 1 Article 8 of the Decree 153/2020/NĐ-CP (amended by Clause 6 Article 1 of the Decree 65/2022/NĐ-CP) stipulating feligible bond buyers in the domestic market in Vietnam in 2023 as follows:
+ Buyers of non-convertible bonds without warrant are professional investors as defined in the Law on securities.
+ Buyers of convertible bonds and warrant-linked bonds are professional investors and strategic investors of which the number of strategic investors of an issue is limited to 100.
+ Professional investors are investors that have financial capacity or securities qualifications as prescribed in Article 11 of the Law on securities. Organizations shall identify professional investors and obtain documents serving identification of professional investors as prescribed in Article 4 and Article 5 of the Government’s Decree No. 155/2020/ND-CP dated December 31, 2020 on elaboration of some articles of the Law on securities and its amending or superseding documents (hereinafter referred to as “Decree No. 155/2020/ND-CP”), except the identification of professional investors prescribed in Point d of this Article.
+ An individual that is identified as a professional investor as prescribed in Point d Clause 1 Article 11 of the Law on Securities shall be eligible to buy privately placed bonds if he/she holds a quantity of listed or registered securities, excluding securities borrowed to conduct margin transactions and those of repo transactions, of which the daily average price determined in a minimum period of 180 consecutive days preceding the date on which he/she is identified as a professional investor shall not be lower than VND 02 billion. The certification of a professional investor status as prescribed in this Point shall be valid for 03 months from the date of certification.
Pursuant to Clause 2 and 3, Article 8 of the Decree 153/2020/NĐ-CP (amended by Clause 6 Article 1 of the Decree 65/2022/NĐ-CP) stipulating eligible bond buyers in the domestic market in Vietnam in 2023 as follows:
- Responsibilities of bond buyers
+ Fully access the information disclosed by the issuer; have a thorough grasp of terms and conditions of bonds, and other commitments of the issuer before deciding to buy and trade bonds.
+ Clearly understand risks that may occur during investment and trading of bonds; clearly understand and ensure compliance with regulations on eligible bond buyers, and trading of privately placed corporate bonds in accordance with regulations herein and relevant laws.
+ Self-assess and assume responsibility for their investment decisions as well as incur any risks which may occur during investment and trading of bonds. The State provides no guarantee that the issuer will make full and timely payment of bond principal and interest amounts when they become due, and exercise other rights for bondholders.
+ Before buying bonds (both in primary market and secondary market), each investor must sign a written certification of compliance with the provisions of Points a, b and c of this Clause, and shall assume responsibility for its decision to buy bonds after signing the certification. The written certification shall be made using the form in Appendix V enclosed herewith, and shall be kept together with the bond offering dossier or by the securities company where the investor conducts bond transactions in accordance with regulations of law.
+ Conduct bond transactions according to the provisions of Article 16 of this Decree; not sell bonds to or make joint investment in bonds with investors that are not professional investors in any forms. Capital mobilization and purchase/investment in corporate bonds by credit institutions, FBBs and fund management companies shall comply with specialized laws.
+ When selling bonds in the secondary market, provide bond buyers with adequate information which has been disclosed by the issuer as prescribed in this Decree.
- Rights and benefits of bond buyers
+ Access adequate information disclosed by the issuer as prescribed in this Decree, and bond offering dossiers as requested.
+ Receive full and timely payments of bond principal and interests when they become due, and perform other corporate actions (if any) under terms and conditions of bonds and as agreed upon with the issuer.
+ Request the issuer to redeem bonds before maturity as prescribed in Clause 3 Article 7 of this Decree.
+ When buying bonds in the secondary market, request bond sellers to provide adequate information which has been disclosed by the issuer as prescribed in this Decree.
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