Changes in regulations to strengthen private placement bonds

September 20, 2022 - 21:31
Decree 65 amends regulations on bond issuance purposes to strengthen the responsibilities and obligations of issuers in using raised capital for the right purposes.
Piles of VNĐ500,000 banknotes. — Photo

HÀ NỘI — The Government on September 16 issued a new decree on offering and trading private placement bonds.

Decree 65/2022/NĐ-CP amends and supplements a number of articles of Decree 153/2020/NĐ-CP dated December 31, 2020 on offering and trading private placement bonds in the domestic market and offering corporate bonds to the international market.

The new decree amending regulations on bond issuance purposes seeks to strengthen issuers' responsibilities and obligations in using bond proceeds for the intended purposes.

It also supplements Clauses 4 and 5, Article 5 on principles of bond issuance and use.

Specifically, for issued bonds in the domestic market, enterprises may only change the conditions and terms of bonds specified in Article 6 of this decree if they are approved by leaders of the issuing business, and approved by the number of bondholders representing at least 65 per cent of the total number of bonds of the same type in circulation.

Information on the change in conditions and terms of bonds must be deemed irregular information disclosed by the issuing enterprise.

The par value of the bonds is also revised to increase from VNĐ100,000 or multiples of VNĐ100,000 to VNĐ100 million or multiples of VNĐ100 million.

Decree 65/2022/NĐ-CP clearly states that with bonds offered in the domestic market, the par value is VNĐ100 million or a multiple of VNĐ100 million.

In Decree 65, the way to identify professional investors who are allowed to invest in and trade private placement bonds is also amended.

A professional investor means an investor with financial capacity or professional qualifications in the securities sector as prescribed in the Law on Securities. Organisations responsible for identifying professional securities investors and documents to identify professional securities investors must comply with the provisions of Decree 155/2020/NĐ-CP detailing the implementation of a number of articles of the Law on Securities and amendments, supplements, and replacements, except for the identification of professional securities investors specified in Point d of this Clause.

In addition, the Decree 65 amends a number of regulations on the time limit and content of information disclosure in order to enhance the transparency of bond issuers and the use of funds raised from the issuance.

The time limit for disclosing information on bond offering results is now shortened from ten days to five days.

"No later than five working days from the date of completion of the bond offering, the enterprise shall disclose information about the results of the offering to the bondholders and send the notice to stock exchanges," according to the decree.

In case enterprises unsuccessfully offer or cancel the bond offering, within five working days from the end of the bond distribution, enterprises shall disclose information and send the disclosure content to the stock exchanges.

The decree also strengthens management and supervision, including monitoring the financial market sector, the banking credit sector, and other sectors of the economy.

Speaking at a press conference of the Ministry of Finance on Monday, Nguyễn Hoàng Dương, deputy director of the Ministry of Finance's Department of Banking and Financial Institutions, said that Decree 65 amends and supplements the conditions for bond issuance to comply with the provisions of the Law on Securities and the Law on Enterprises.

The decree adds provisions to bond offering documents, including credit rating results according to cases and an implementation roadmap as prescribed for bond offerings to the public, Dương added. — VNS