MoF to submit solutions to strengthen bond market

HÀ NỘI — The Ministry of Finance (MoF) has just submitted to the Government a draft decree on trading private placement of corporate bonds in the domestic market and offering bonds to international markets.

The decree amends and supplements a number of articles of Decree  六 五 that amends and supplements Decree  一 五 三.

The ministry proposed to continue applying regulations on identifying professional securities investors in Resolution  六 五 from January  一,  二0 二 四.

Decree  六 五 stipulates that professional securities investors must ensure an average holding portfolio of VNĐ 二 billion (US$ 八 五,0 一 六) for at least  一 八0 days, excluding borrowed money.

According to MoF, amid the current difficult environment in liquidity, the extension of the regulations on professional securities investors will help the market have more time to adjust and can maintain the bond investment demand of investors who have financial potential but have not met a requirement on the provisions of professional securities investors of Decree  六 五.

The Ministry also proposed the Government allow a one-year extension of the mandatory credit rating requirement in Decree  六 五. Decree  六 五 requires from January  一,  二0 二 三, bond offering dossiers of issuers must have credit rating results, applicable to enterprises whose total value of bonds mobilised in  一 二 months is more than VNĐ 五00 billion and more than  五0 per cent equity, or total outstanding debt is greater than  一00 per cent of the equity. 

Due to the difficulty in capital mobilisation, if enterprises have to perform credit rating, it will take considerable time and increase the issuance cost. Therefore, the Ministry submitted to the Government for permission to postpone the implementation of regulations on mandatory credit rating requirements for one year, from January  一,  二0 二 四, instead of from January  一,  二0 二 三, as prescribed in Decree  六 五. 

For bonds offered to the public, the issuer must still get a credit rating from the beginning of next year.

In addition, the Ministry of Finance also proposed allowing issued bonds to extend the bond's maturity.

On December  一 三, Prime Minister Phạm Minh Chính requested MoF to submit measures ensuring the healthy, transparent, safe, and effective operations of the corporate bond market before December  二0.

According to the dispatch signed by the PM, in accordance with Resolution No. 一 五 六/NQ-CP dated December  六,  二0 二 二 at the November Government meeting, the Finance Minister must promptly take timely and effective solutions to stabilise and promote the development of the corporate bond market, thus ensuring legitimate rights and interests of investors in line with regulations.

The ministry is tasked with promptly reviewing the solvency and payment capacity of corporate bond issuers, especially bonds due for payment in  二0 二 二 and  二0 二 三; proactively taking specific and effective measures to handle issues within its authority to ensure the absolute safety and security of financial and monetary markets. — VNS