Under Government Decree 163, which is designed to replace Decree 90 of 2011, from February 1, enterprises that have operated for at least one year after obtaining enterprise registration certificates will be allowed to issue corporate bonds.
Compared to Decree 90, the new regulation prescribes more favorable conditions for enterprises to mobilize capital through bond issuance.
Specifically, it only requires an enterprise to have a financial audit report of the preceding year conducted by a qualified auditing firm, instead of having profitable production or business operation results of the previous year under the current regulation.
However, enterprises will have to make full payment of principals and interests of issued bonds for the last three years.
Another salient point of the new regulation is allowing issuing enterprises to redeem their bonds before the date of maturity or swap bonds for debt clearance or rescheduling provided that such is stated in the prospectus before the bond issuance.
Decree 163 also contains the first-ever regulation on corporate green bonds, which are issued for investment in environmental protection projects under the Law on Environmental Protection.
The decree regulates that capital mobilized from the issuance of green bonds must be disbursed for environmental protection projects approved by competent agencies, and separately accounted and managed.
Besides, while Decree 90 only has three articles regulating information disclosure and statements, the new regulation devotes 10 articles for this matter.
Specifically, it requires enterprises making private placement of bonds to disclose their information on the stock exchanges.
The stock exchanges will act as focal points for receiving information and develop special websites for providing information of issuing enterprises and bond issuance by domestic and foreign enterprises such as bond codes, volumes, terms and conditions of bond redemption and swap, target markets, etc.
They will have to report on a biannual and annual basis on the issuance of corporate bonds, including the number of enterprises issuing corporate bonds, average issuance interest rates, the number of issuance-registering enterprises, bond depositing, bond principal and interest payment, and number of bondholders.
Issuing enterprises are requested to disclose information at least 10 days before making private placement of bonds. Information to be disclosed must neither include advertisements nor be disclosed via the mass media.
Results of bond issuance must be notified to bondholders and the stock exchanges within five days after the issuance.- (VLLF)