New rules promote sustainable growth of corporate bond market

New rules promote sustainable growth of corporate bond market

According to the State Securities Commission, the new decree completes the legal framework, thoroughly address practical difficulties, and enhance transparency to protect the legitimate rights of investors, creating conditions for businesses to raise medium- and long-term capital to serve economic growth.

The new decree enhances transparency to protect the legitimate rights of investors, creating conditions for businesses to raise medium- and long-term capital to serve economic growth. VNA/VNS Photo

New regulations on private placement of corporate bonds will help strengthen investor confidence and promote the development of a sustainable market, according to the State Securities Commission (SSC). 

Decree 200/2026/NĐ-CP has taken effect this month to replace Decree No. 153/2020/NĐ-CP, Decree No. 65/2022/NĐ-CP and Decree No. 08/2023/NĐ-CP. 

According to the SSC, the new decree completes the legal framework, thoroughly addresses practical difficulties and enhances transparency to protect the legitimate rights of investors, creating conditions for businesses to raise medium- and long-term capital to serve economic growth. 

One of the notable changes in the decree is the clear distinction between the conditions, documents and procedures for offering securities according to two different groups of businesses: the first group includes public companies, securities companies and securities investment management companies; and the second group includes businesses not falling under the aforementioned categories.

“This separation aims to both facilitate businesses in the implementation process and to make it easier for management authorities to categorise inspections, audits and violations according to the specific characteristics of each group,” the SSC explains.

To ensure the financial safety of the system, the decree added a crucial condition: the debt of enterprises, including the value of bonds expected to be issued, must not exceed five times their equity capital, as stipulated in the amended Enterprise Law of 2025. However, this regulation also includes reasonable exceptions for State-owned enterprises, credit institutions, insurance companies, or entities issuing bonds to implement specific real estate projects.

In parallel with controlling financial leverage, Decree 200 also redefines the purpose of issuance and the management and use of capital. Accordingly, funds raised from bond issuance must be used to implement investment projects in accordance with the forms stipulated in the Investment Law.

Notably, enterprises are obligated to separately monitor this capital, ensuring that the management and use of capital are in line with the issuance plan announced to investors. In cases where an enterprise issues bonds through a second party to use the capital for an investment project, the issuer must establish strict monitoring measures to ensure the second party fulfils its commitments. 

The new decree enhances transparency to protect the legitimate rights of investors, creating conditions for businesses to raise medium- and long-term capital to serve economic growth. VNA/VNS Photo

To create flexibility while maintaining security, the decree allows businesses to deposit funds in commercial banks or purchase certificates of deposit when the raised capital has not yet reached the disbursement deadline.

Simultaneously, the mechanism for changing bond terms or issuance purposes has been standardised. Specifically, it must be approved by the competent authority and receive the consent of bondholders representing 65 per cent or more of the total outstanding bonds. For bondholders who do not agree, the enterprise is required to complete the early repurchase of the bonds before implementing these changes.

Aiming for a professional bond market and minimising risks for individual investors, the decree has significant adjustments regarding the eligible participants in transactions.

Accordingly, professional individual investors are only allowed to purchase and transfer privately placed corporate bonds under certain conditions. Specifically, for bonds other than convertible bonds issued by financial institutions or public companies, individuals can only participate if the bond has a credit rating and is secured by collateral, or if there is a payment guarantee from a credit institution. The decree also clarifies that the collateral must have sufficient value to pay the entire principal of the bond and absolutely cannot include shares, stocks, or capital contributions of the issuing company itself. This regulation aims to ensure that the collateral is substantial and highly liquid in the event of a crisis.

In terms of documentation and information transparency, the new decree abolishes the regulation allowing the use of audited semi-annual or quarterly financial statements as a basis for determining issuance eligibility. Instead, businesses are required to rely on audited annual financial statements to accurately determine the debt-to-equity ratio, in line with the spirit of the 2025 Enterprise Law. For parent-subsidiary company models, both audited consolidated financial statements and audited financial statements of the parent company are mandatory.

The responsibilities of service providers such as consulting firms, issuing agents, auditing organisations, and credit rating agencies have also been increased. Specifically, these organisations are directly responsible for the accuracy and truthfulness of the reports and documents in the issuance dossier.

The decree also regulates the issuer's obligation to disclose information, which extends until the bonds are fully delinquent, including periodic reports on capital utilisation, to ensure maximum oversight for investors.

According to the SSC, the new decree is a significant step forward in perfecting the institutional framework for Việt Nam's capital market. By combining measures to tighten discipline with regulations to create transparency, the decree not only protects investors but also helps financially sound businesses find effective capital-raising channels. 

“This helps bring the corporate bond market back onto a sustainable development trajectory and makes a positive contribution to the development of the economy,” the SSC said. 

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