Circular No. 211/2012/TT-BTC dated December 05, 2012 of the Ministry of Finance guiding implementation a number of articles of the Government’s Decree No. 90/2011/ND-CP, of October 14, 2011, on issuance of corporate bonds

CIRCULAR

GUIDING IMPLEMENTATION A NUMBER OF ARTICLES OF THE GOVERNMENT’S DECREE NO. 90/2011/ND-CP, OF OCTOBER 14, 2011, ON ISSUANCE OF CORPORATE BONDS

Pursuant to the Government’s Decree No. 118/2008/ND-CP, of November 27, 2008 defining the functions, tasks, powers and organizational structure of the Ministry of Finance;

Pursuant to the Government’s Decree No. 90/2011/ND-CP, of October 14, 2011 on issuance of corporate bonds;

Pursuant to the Government’s Decree No. 58/2012/ND-CP, of July 20, 2012 detailing and guiding implementation of a number of articles of the Law on Securities and Law on amending and supplementing a number of articles of the Law on Securities;

At the proposal of Director General of Banking and Financial Institutions;

The Minister of Finance promulgates Circular guiding implementation a number of articles of the Government’s Decree No. 90/2011/ND-CP, of October 14, 2011, on issuance of corporate bonds.

Article 1. The scope of application and subjects of regulation

1.This Circular guides implementation a number of articles of the Government’s Decree No. 90/2011/ND-CP, of October 14, 2011, on issuance of corporate bonds (hereinafter collectively referred to as the Decree No. 90/2011/ND-CP)

2.The subjects of regulation of this Circular are enterprises issuing bonds, organizations and individuals relating to activities of bond issuance.

3.Enterprises in securities, banking, when issuing bonds, must abide by provisions in clause 3 Article 1 of the Decree No. 90/2011/ND-CP and implement regimes of notice, report as prescribed in this Circular.

Article 2. Interpretation of terms

In addition to terms having been explained in Article 2 of the Decree No.90/2011/ND-CP, in this Circular, the terms are construed as follows:

1.“Bond term" means duration from the day of issuing bond to maturity day of bond.

2.“Day of issuing bond” means day when bond begin to take effect and the time in serve as basis to determine day of paying bond principal and interest.

3.“Nominal interest rate of bond” means the percentage (%) between the annual interest on theparvalue of bond which the issuing enterprise must pay to owner of bond on dates of paying interest under conditions, terms of bond.

4. “Income from bond issuance” means interest decided by the issuing-bond enterprise on the basis of result of the bond issuance term and in serve as basis to calculate price of bond.

5.“The time of converting bonds into stocks” means time for completion of converting bonds into stocks of convertible bonds.

Article 3. Conditions, terms of bonds

1.Enterprises must ensure publicize conditions, terms of bonds to be issued as prescribed at issuance market.

2.For bonds to be issued at domestic market, conditions, terms of bonds must ensure the following principal contents:

a) Bond term;

b) Volume of bonds to be issued;

c) Currencies used for bond issuance and payment;

d) Par value of bonds;

dd) Form of bonds;

e) Type of bonds to be issued:

e1) For convertible bonds, the issuing-bond enterprise must provide clearly conditions, terms relating to converting bonds before issuing, including:

-Time limit of converting bonds into stocks, stating clearly time and place of registering convert, the beginning time and the ending time of convert;

-Principle to determine rate of converting bonds into stocks;

-Order of, procedures for converting bonds into stocks;

-Commitments on implementing obligations of the issuing-bond enterprise for owners of bonds;

-Plans on compensation for owners of bonds in case the issuing-bond enterprise fail to convert bonds into stocks under conditions, terms having been publicized at time of bond issuance.

e2) For inconvertible bonds accompanied with warrants, the issuing-bond enterprise must provide clearly conditions, terms relating to warrants for investors, including:

-Quantity of warrants be issued accompanied with bonds;

-Conditions to transfer warrants;

-Order of, procedures for implementation of right to buy stocks;

-Commitments on implementing obligations of the issuing-bond enterprise for owners of bonds;

-Plans on compensation for owners of bonds in case the issuing-bond enterprise fail to implement conditions, terms of warrants having been publicized at time of bond issuance.

e3) For bonds with payment warrant, the issuing-bond enterprise must provide clearly terms relating to payment warrant for investors, including: Methods of payment warrant; scope of payment warrant; order of, procedures for implementing payment warrant when the issuing-bond enterprise fail to implement payment; documents proving payment warrant as prescribed by law on registering secured transaction; commitments on implementing obligations of the issuing-bond enterprise for owners of bonds.

g) Methods of bond issuance;

h) Provisions on re-purchasing and swapping bonds (if any).

3.For bonds to be issued in international market, the issuing enterprise shall implement disclosure of information, conditions, terms of bonds as prescribed by the issuance market.

Article 4. Bond issuance for many times at domestic market

1.Enterprises issuing bonds for many times must meet the following conditions:

a) To meet conditions specified in Article 13 of the Decree No. 90/2011/ND-CP.

b) To have demand to mobilize capital for many times in conformity with investment project or plan on production and business of enterprise.

c) Plan on bond issuance must state clearly subjects, quantity of issuance, value of issuance and tentative time for issuance of each times.

2.The issuing-bond enterprises meeting conditions of issuance specified in clause 1 of this Article may issue bonds for many times but maximally not exceeding 12 month. In case which times of issuance are in various financial years, the issuing-bond enterprises must do procedures for new issuance.

3.Approval and acceptance of plan on bond issuance for many times

c) Dossier of bond issuance, apart from as specified in clause 2 Article 14, clause 2 Article 15 of the Decree No.90/2011/ND-CP, the plan on bond issuance must specify subjects, quantity of issuance times, issuance value and tentative time for issuance of each times enclosed with project or plan on using capital for many times.

b) The written approval or acceptance on bond issuance of competent authorities must state clearly quantity of issuance times, issuance value of each times and tentative time for issuance.

Article 5. Methods of bond issuance at domestic market

1.Bond bidding

a) Principle of bidding:

-Keeping in secret all bidding information of bidder and information relating to the bidding interest rate;

-Publicity, transparence, equality onrights andobligations of subjects participating in tender;

-Abiding by provisions of law on private placement of securities.

b) The issuing-bond enterprises must publicize fully information relating to bidding, including the following principal contents:

-Subjects participating in tender;

-Tender time and place, stating clearly time of receiving tender, time of tender closure, time of publicizing result of tender;

-Volume of calling tender;

-Conditions, terms of bonds going to be issued;

-Form of tender and volume of calling tender for each form of calling tender: Competition on interest rate, non-competition on interest rate or combining both;

-Principle and process of determining result of tender winner (interest rate winning tender and volume winning tender, price winning tender) including case of determining volume winning tender when there are many investors place a same interest rate level.

2.Bond issuance underwriting

a) Subjects participating in issuance underwriting:

-Subjects participating in issuance underwriting include securities companies, credit institutions and other financial institutions allowed to supply issuance underwriting service as prescribed by current law.

-For each issuance times, enterprises may select one or some eligible organizations in order to implement issuance underwriting. When selecting many organizations for issuance underwriting, enterprises select 01 organization for main issuance underwriting under conditions decided by enterprises.

b) The process of issuance underwriting implemented under agreement between the issuing-bond enterprise and issuance underwriting organizations as prescribed by law and practice of market for each defined issuance underwriting form. The issuing-bond enterprise must sign underwriting contract with organizations selected to do issuance underwriting. The issuance underwriting contract must comprise some principal content as follows:

-Names, addresses, legal representatives of the issuing-bond enterprise and issuance underwriting organizations;

-Underwriting form;

-Conditions, terms of bonds;

-Volume of issuance underwriting;

-Rights and obligations of relevant parties;

-The handling principle upon happening disputes;

-Charge of issuance underwriting is agreed by two parties, based on nature of each bond issuance underwriting times.

3.Agent of bond issuance

a) Depend on nature of bond issuance, the issuing-bond enterprise may select an eligible agent to do as issuance agent service or concurrently do issuance agent and payment agent for bond interest and principal.

b) Subjects participating in issuance agent include securities companies, credit institutions and other financial institutions allowed to supply issuance agent service as prescribed by current law.

c) The process of bond issuance agent comply with agreement between the issuing-bond enterprise and the organizations doing issuance agent as prescribed by law and market practice.

d) The issuing-bond enterprise must sign issuance agent contract with organizations doing issuance agent. The issuance agent contract must comprise some principal contents as follows:

-Names, addresses, legal representatives of the issuing-bond enterprise and issuance agent organizations;

-Agent form;

-Volume issued through agent;

-Conditions, terms of bonds;

-Rights and obligations of relevant parties;

-The handling principle upon happening disputes;

-Charge of issuance agent is agreed by two parties, based on nature of bond issuance.

4.Bond retail

a) Only the issuing-bond enterprises being credit institutions may sell directly to bond investors as prescribed in point d clause 1 Article 17 of the Decree No. 90/2011/ND-CP.

b) Credit institutions must comply with guides of the State bank of Vietnam on methods of bond retail.

Article 6. Notice and registration of bond issuance

1.Notice and registration of bond issuance at international and domestic markets as prescribed in Article 30 of the Decree No. 90/2011/ND-CP are implemented as follows:

a) At least 03 (three) working days prior to organize bond issuance, the issuing-bond enterprises must send registration (notice) to the Ministry of Finance for summarization, monitor of corporate bond issuance under the task specified in clause 2 Article 34 of the Decree No. 90/2011/ND-CP

b) Content of the bond issuance notice made in according to the Annex No.1 enclosed with this Circular.

c) When sending the bond issuance notice to the Ministry of Finance, enterprises are responsible for sending the bond issuance notice to competent authorities for approval and acceptance of the bond issuance project.

2.Implementation of enterprises in bond issuance notice is in serve for the Ministry of Finance to review, monitor corporate bond issuance, not means that the Ministry of Finance accept plan on bond issuance of enterprises or confirm enterprises being eligible to issue bonds.

Article 7. The reporting regime

1.The issuing-bond enterprises are responsible for reporting to competent authorities for approval and acceptance of plan on bond issuance and reporting to the Ministry of Finance on issuance situation. In case of issuing bonds in international market, enterprises must concurrently send to the State bank of Vietnam. The reporting time and content are implemented as follows:

a) Report on issuance result:

-Time of sending report: Within 15 days from the day of completing issuance, the issuing-bond enterprises are responsible for report on issuance result.

-Content of report made in according to the Annex No.2 enclosed with this Circular.

b) Periodical report on payment of principal and interest until bond maturity:

-Time of sending report: Within 30 days from the ending day of quarter II (for 6-month-of-head-year report) and the ending day of year (for annual report).

-Content of periodical reports made in according to the Annex No.3 enclosed with this Circular.

c) Report after the deadline for payment ofallbond principal and interest: Within fifteen (15) days, from the deadline for payment of all bond principal and interest, the issuing-bond enterprises are responsible for report on payment of bond principal and interest in according to the Annex 3 enclosed with this Circular.

2.For enterprises issuing convertible bonds or bonds accompanied with warrants, the reporting regime is complied with provisions in clause 1 this article and provisions in clause 3 Article 32 of the Decree No. 90/2011/ND-CP.

3.For the issuing-bond enterprises being public companies, apart from complying with the reporting regime as prescribed in clause 1 this Article, they must implement reports as prescribed by law on securities and securities market.

4.If enterprises have noticed bond issuance as prescribed in Article 6 of this Article but fail to implement bond issuance, they must have written report to competent authorities for approval and acceptance of plan on bond issuance, and send to the Ministry of Finance. In case of issuing bonds in international market, enterprises must concurrently send to the State bank of Vietnam.

Article 8. Organizing implementation

1.This Circular takes effect on January 20, 2013.

2.Enterprises issuing bonds at time before the effective day of this Circular shall implement the periodical reporting regime as prescribed in Article 7 of this Circular.

3.In the course of implementation, if arising any difficulties or problems, the issuing-bond enterprises and relevant units should report timely to the Ministry of Finance for consideration and specific guides.