Decree No. 81/2020/ND-CP takes effect from September 1, 2020, amending and supplementing regulations on conditions for corporate bond issuance mentioned in Decree No. 163/2018/ND-CP. Accordingly, from September 1, 2020, to issue convertible corporate bonds, enterprises must meet the following conditions:
- Ensure compliance with the limit on the number of investors when issuing and trading bonds:
– Privately issued corporate bonds: less than 100 investors.
– Corporate bonds are restricted from trading to less than 100 investors, excluding professional securities investors, within 1 year from the date of completion of the issuance. After 1 year, corporate bonds can be traded without restriction on the number of investors.
- Having financial statements for the year immediately preceding the year of issue audited by a qualified auditing organization.
- Sign a consulting contract with a consulting organization on bond issuance documents. Bond issuance consulting organizations are securities companies, credit institutions and other financial institutions that are allowed to provide consulting services on bond issuance documents in accordance with law. When providing services, the issuer is responsible for reviewing whether the issuer has fully met the regulations on issuance conditions and bond issuance documents.
- There is a plan to issue convertible bonds, and a plan to issue bonds with warrants must be approved by the General Meeting of Shareholders.
- Full payment of both principal and interest of issued bonds for 03 consecutive years before the bond issuance (if any).
- Satisfy financial safety ratios and operational safety ratios as prescribed by law.
- Ensure that the outstanding balance of privately issued corporate bonds at the time of issuance (including the expected issuance volume) does not exceed 05 times the equity according to the latest quarterly financial statements at the time of issuance. issue approved by the competent authority.
- Each issuance must be completed within 90 days from the date of information disclosure prior to issuance; the next issuance must be at least 06 months apart from the previous one, bonds issued in one issuance must have the same terms and conditions.
- Convertible bonds are restricted from being transferred within 1 year (Except for professional securities investors).
Thus, the conditions for the issuance of corporate bonds have been specified more specifically and strictly than the current regulations in order to continue to operate and develop the corporate bond market safely and sustainably.
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