Can businesses offer bonds to foreign markets?

Offering bonds to foreign markets opens up opportunities for Vietnamese businesses to access international capital and strengthen their position in the global financial arena. In the following article, Long Phan will share valuable insights about the conditions, principles, and processes involved in preparing bond offerings, helping you successfully and effectively seize development opportunities.

Principles when offering bonds to foreign markets

Businesses offering bonds to international markets must comply with strict rules. Pursuant to Article 24 of Decree 153/2020/ND-CP clearly stipulates the necessary conditions for this issuance. Specifically, they are:

1. Enterprises offering bonds to the international market (private offering or public offering) must comply with the regulations in Decree 153/2020/ND-CP and meet the offering conditions according to regulations in the developed market.
2. Trading of corporate bonds offered for sale to the international market is carried out in accordance with regulations in the issuing market.

Conditions for offering bonds to foreign markets

To be able to offer bonds to the international market, businesses need to meet the conditions. Pursuant to Article 25 of Decree 153/2020/ND-CP clearly states the specific requirements for each type of bond as follows:

Case 1: For non-convertible bonds without warrants

• The issuing enterprise is a joint stock company or limited liability company established and operating under Vietnamese law;
• The plan to issue bonds to the international market is approved and approved by competent authorities according to the provisions of Article 28 of Decree 153/2020/ND-CP;
• Meet the financial safety ratio and operational safety ratio according to the provisions of specialized laws;
• Comply with regulations on foreign loan management and debt repayment of enterprises not guaranteed by the Government and laws on foreign exchange management;
• Offering conditions according to regulations in the issuing market.

Case 2: For convertible bonds or bonds with warrants:

• The issuing enterprise is a joint stock company that meets the same issuance conditions as in case 1;
• The conversion of bonds into stocks and the exercise of rights attached to warrants must meet the regulations on the ownership ratio of foreign investors according to the provisions of law;
• Offerings of convertible bonds and bonds with warrants must be at least 06 months apart from the date of completion of the most recent offering.

Procedure for offering bonds to foreign markets

Prepared documents

Enterprises need to carefully prepare documents to offer bonds to foreign markets. Pursuant to Clause 2, Article 27 of Decree 153/2020/ND-CP, the necessary documents in this dossier include:

1. The bond offering plan is approved and accepted by competent authorities according to the provisions of Article 28 of Decree 153/2020/ND-CP.
2. Certificate of capital account for securities issuance in foreign currency at an authorized credit institution according to regulations of the State Bank of Vietnam.
3. Document from the State Bank of Vietnam confirming that the issuance limit is within the country’s total foreign commercial loan limit.
4. Decision to approve and approve the bond issuance plan by the competent authority.
5. Financial statements are prepared according to international accounting standards in case the issuing market requires it.
6. Offer registration documents with competent authorities in the issuing market or legal opinion of an international law consulting company on the fact that the enterprise does not have to register with the competent authority of the host country when issuing bonds.
7. For bond offerings to international markets of public companies, securities companies, and securities investment fund management companies, in addition to the above documents, bond offering documents also include:

• Registration form for offering bonds to the international market according to the form in Appendix II of Decree 153/2020/ND-CP.
• Copy of Decision of the General Meeting of Shareholders/Board of Directors, Board of Members/Chairman of the company approving the bond offering documents to the international market.

Implementation steps

The process of offering bonds to foreign markets is specifically regulated in Article 26 of Decree 153/2020/ND-CP. The steps vary depending on the type of business.

1. For companies that are not public companies:

• Enterprises prepare bond offering documents according to regulations and organize the offering in the issuing market.
• Issuing enterprises will disclose information according to the provisions of Article 29, Article 30, Article 31 of Decree 153/2020/ND-CP and regulations of the issuing market.

2. For public companies, securities companies, and securities investment fund management companies:

Step 1: Submit application

• Enterprises prepare bond offering documents according to regulations and send them to the State Securities Commission.

Step 2: Receive documents

• Within 10 days from the date of receipt of complete and valid documents, the State Securities Commission approves in writing.
• In case of refusal, the State Securities Commission shall respond in writing and clearly state the reason.

Step 3: Announce information and make an offering

• After approval by the State Securities Commission, the enterprise discloses information before the offering according to the provisions of Article 29 of Decree 153/2020/ND-CP and conducts the bond offering according to the regulations of the developing market.
• Within 10 days from the date of completion of the offering, the enterprise reports the offering results according to the form in Appendix IV of Decree 153/2020/ND-CP to the State Securities Commission.
• Enterprises pay bond principal and interest and implement an information disclosure regime according to regulations of the issuing market and Section 2 Chapter III of Decree 153/2020/ND-CP.

Consulting and supporting the process of offering bonds to foreign markets at Long Phan

Long Phan provides in-depth consulting services on offering bonds to foreign markets. With professional support from Long Phan, customers will confidently access international capital sources to ensure compliance with regulations and open up new development opportunities for businesses.

Consulting and support services at Long Phan include:

• Consulting on strategies and making appropriate bond issuance plans.
• Support the preparation of complete legal documents according to domestic and international regulations.
• Guidance on the information disclosure process and legal compliance.
• Consulting and support in solving problems that arise during the process of offering bonds to foreign markets.
• Consulting on related issues after offering bonds to foreign markets.

Long Phan is proud to be a reliable partner, ready to accompany customers on their journey to conquer the international capital market. Please contact Long Phan immediately via hotline 0906735386 to successfully start the plan to issue bonds to foreign markets. With Long Phan, customers will confidently reach out and seize development opportunities in global financial integration.