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Vietnam's Ministry of Finance: Enterprises must be responsible for bond debt

On April 13, Mr. Nguyen Hoang Duong, Deputy Director of the Finance and Banking Department (Ministry of Finance), shared some issues related to the corporate bond market after Decree 08/2023/ND-CP issued by the Government.
According to Mr. Duong, the new regulations of Decree 08/2023/ND-CP amending, supplementing, and suspending the effect of several articles in Decrees regulating the private offering and trading of corporate bonds in the market domestic market and offering corporate bonds to the international market, has contributed to removing difficulties for the corporate bond market and noted for issuers, investors and service providers.

Mr. Nguyen Hoang Duong said that the Decree was issued in the context of the need to remove some short-term difficulties for businesses while ensuring the rights and interests of investors. 

According to Decree 08, enterprises can negotiate with bondholders to pay bond principals and interests due to other assets when there are difficulties in paying bond principals and interests in full and on time according to the release plan. Accordingly, the issuers and the investors can negotiate to balance the resources of the enterprise and pay the due debt obligations.

Enterprises may negotiate with investors to change the terms and conditions of bonds according to regulations, and parley to extend the bond's term up to no more than 02 years for bonds issued before September 16, 2022.

In addition, Decree 08 also ceases to be effective for the provisions of Decree 65/2022/ND-CP on three contents: determining the status of professional securities investors as individuals; bond distribution time of each issuance; credit rating results for bond issuers.

Besides the policy solutions in Decree No. 08/2023/ND-CP mentioned above, to develop a safe and healthy corporate bond market and strengthen investors' confidence, Mr. Duong emphasized each participant in the market had to comply with the provisions of the law.

Also read: Bond issuers seek solutions to delay bond debt payment » Breaking News, Latest World News Updates - VietReader Viet Nam

In particular, the Deputy Director of the Finance and Banking Department noted that enterprises with outstanding bond debt are responsible to the end for their bond debt obligations, proactively transparent information about their financial situation and debt repayment ability the enterprise through the results of credit rating, audit of financial statements, full disclosure of information on payment of bond principal and interest, use of capital from bond issuance, responsible fully pay bond debt obligations according to the bond issuance plan announced to investors to ensure credibility in the market.

Also read: More bond issuers face debt repayment woes » Breaking News, Latest World News Updates - VietReader Viet Nam

On the investor side, Mr. Nguyen Hoang Duong said that it is necessary to have an entire understanding of the provisions of the law, have full access to information about the issuer and bonds, and carefully assess the financial situation of the business, distinguish corporate bond products that are not bank deposits, evaluate the level of risk commensurate with the returns when investing in bonds, make their own decisions, and take responsibility for their investment decisions mine.

Service providers are responsible for improving service quality, fully complying with the law, and fulfilling the obligation to report, advise and provide sufficient information for investors to buy bonds, clarifying the difference between corporate bonds and bank savings deposits, absolutely do not invite investors who do not meet the conditions to become professional securities investors to buy bonds. 

Mr. Nguyen Hoang Duong affirmed that state management agencies would continue to promote propaganda and law dissemination and inspection, examination and supervision of activities related to the corporate bond market.

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