Draft revised decree on private bond placement to be submitted next week

The Ministry of Finance will submit the draft amendments to Decree 65 on private corporate bond placement to the government early next week, announced Deputy Minister Nguyen Duc Chi.

Chi told the government’s regular press conference on Thursday that his ministry is completing the draft after consulting ministries, sectors, organizations and experts.

He expressed his hope that the decree amendments would be soon approved by the government to ensure that the regulations suit the reality, thus reinforcing market confidence, creating favorable conditions for issuers, and protecting the legitimate rights and interests of investors in the corporate bond market.

Previously, on January 27, Prime Minister Pham Minh Chinh requested the MoF to urgently submit to the government a draft decree amending and supplementing Decree 65. The latter, which was issued on September 16, 2022, amends and supplements Decree 153 on private placement and trading of corporate bonds in domestic and foreign markets.

Emphasizing the importance of the decree amendment, Le Xuan Nghia, member of the National Financial and Monetary Policy Advisory Council, said the revised decree would help stocks of real estate companies and banks gradually regain value, contributing to gradual recovery of the stock market.

The draft, featuring a number of important changes, will have a great impact on the market. For instance, it will amend Article 8 of Decree 65, allowing a one-year delay to tightened regulations on "professional securities investors" to the beginning of 2024 instead of 2023.

Another one-year delay until 2024 is also applied to the requirement that issuers must have credit ratings when offering large amounts of bonds.

Other important amendments include an extension of a maximum two years for the payment of previously issued bonds with outstanding balance. This means new issuances are permitted for two more years to reverse debt. Bond issuers and holders are allowed to negotiate on the conversion of principal and interest payments of maturing bonds into loans or other assets.

The corporate bond market has been narrowed down by the government's tightened supervision over issuances of corporate bonds via private placements under Decree 65 and market concerns following the arrests of entrepreneurs on charges of committing fraud in this field.

According to the Vietnam Bond Market Association, in 2022, there were 420 private corporate bond placements worth approximately VND244,565 billion ($10.43 billion), accounting for 96% of the total issuance value and down 66% year-on-year.

Businesses bought back VND210,830 billion ($8.99 billion) in bonds, up 46% from 2021.