Consulting service on bond offering process at Long Phan

Article overview

The bond offering process is an important step to help businesses mobilize capital quickly and effectively from the financial market. With consulting services from Long Phan, businesses will receive comprehensive support from planning, legal appraisal to implementing the offering strategy. This not only ensures compliance with legal regulations but also optimizes opportunities to reach potential investors, helping businesses increase financial resources and promote sustainable development.

Consulting on the bond offering process at Long Phan
Consulting on the bond offering process at Long Phan

What are bonds? Conditions for bond issuance

Pursuant to Clause 3, Article 4 of the Law on Securities 2019, bonds are a type of security that confirms the legal rights and interests of the owner of a portion of the debt of the issuing organization.

Conditions for bond issuance are specified in Clause 1, Article 2, Article 9 of Decree 153/2020/ND-CP, specifically:

Types of businesses allowed to issue shares are joint stock companies and limited liability companies established and operating under Vietnamese law. There are also some conditions:

  1. For offering non-convertible bonds without warrants, businesses must meet the following conditions:
  • Pay in full both principal and interest of issued bonds or pay all debts due for 3 consecutive years before the bond issuance (if any); except in the case of offering bonds to creditors who are selected financial institutions.
  • Meet financial safety ratios and operational safety ratios according to specialized laws.
  • Have a bond issuance plan approved and accepted according to the provisions of Article 13 of this Decree.
  • Have the financial statements of the immediately preceding year of the year of issuance audited by a qualified auditing organization according to the provisions of this Decree.
  1. For the offering of non-convertible bonds without warrants of a securities company or a securities investment fund management company that is not a public company: the enterprise must meet the conditions specified in point a, point c, point d, point đ and point e Clause 1 Article 9 Decree 153/2020/ND-CP.
  2. For offering convertible bonds or bonds with warrants:
  • The issuing enterprise is a joint stock company.
  • Subjects participating in the offering as prescribed in Point b, Clause 1, Article 8 of Decree 153/2020/ND-CP.
  • Meet the offering conditions specified in Points b, c, d and đ, Clause 1, Article 9 of Decree 153/2020/ND-CP.
  • Individual convertible bond offerings and bonds with individual warrants must be at least 6 months apart from the date of completion of the most recent offering.
  • Conversion of bonds into stocks and exercise of warrants must meet the regulations on the ownership ratio of foreign investors according to the provisions of law.
Bond issuance conditions
Bond issuance conditions

Bond offering process according to the provisions of law

Prepared documents

Pursuant to Point a, Clause 2, Article 11, Clause 2, Article 12, Decree 153/2020/ND-CP (amended by Clause 9, Article 1, Decree 65/2022/ND-CP), bond offering documents include:

  1. Bond issuance plan.
  2. Documents proving full satisfaction of bond offering conditions.
  3. Documents disclosing information about the bond offering according to the provisions of this Decree and the guidance of the Ministry of Finance.
  4. Contract signed between the issuing enterprise and service providers related to the bond offering.
  5. Periodic reports on the use of proceeds from bond issuance for outstanding bonds.
  6. Credit rating results for bond-issuing enterprises if the issuing enterprise falls into the cases where credit rating is required.
  7. Decision to approve and approve the bond issuance plan.
  8. Written approval from a competent state management agency according to specialized laws (if any).
  9. Written confirmation from a commercial bank or foreign bank branch that the enterprise opens an account to receive money to buy non-convertible bonds without warrants or opens an escrow account to receive money to buy convertible bonds, bonds with warrants of the offering. In case the issuing enterprise is a commercial bank, there must be a written self-certification from that bank that it has received all proceeds from the bond issuance.
  10. Written confirmation of the investor purchasing bonds as prescribed in Point d, Clause 2, Article 8 of this Decree.
  11. Document from the bidding organization, underwriter, or bond issuance agent confirming that proceeds from the bond offering have been transferred to the bond purchasing account of the issuing enterprise. In case the issuing enterprise is a commercial bank, there must be a written self-certification from that bank that it has received all proceeds from the bond issuance.
  12. Other documents related to the bond offering (if any).

For offerings of convertible bonds, bonds with warrants of public companies, securities companies, and securities investment fund management companies, in addition to the above documents, the bond offering dossier also includes:

  1. Registration form for offering for sale according to the form in Appendix I issued with this Decree.
  2. Copy of Decision of the General Meeting of Shareholders/Board of Directors approving the bond offering documents.
  3. The enterprise’s commitment not to violate the regulations on cross-ownership according to the provisions of the Law on Enterprise at the time of converting bonds into shares and the time of exercising the rights of warrants.

For secured bonds, in addition to the documents on the bond offering dossier, it must include documents on the legal status of the secured assets, and documents on the valuation of the secured assets by an organization with an appraisal function prices and documents on the registration of security interests in accordance with the law on the registration of security interests, documents and information on the payment order of investors holding bonds when disposing of security assets guarantee to pay the debt.

For bonds offered in multiple installments, it is necessary to add:

  1. Documents on the project or plan to use capital in multiple installments;
  2. Update the offering and use of bond capital from previous offerings according to the bond issuance plan;
  3. Update the financial situation of the issuing enterprise in case the next offering is 03 months or more after the previous offering and in case the next offering is in a different financial year from the previous offering.

Bond offering process

Pursuant to Clause 2, Article 11 of Decree 153/2020/ND-CP, the steps for offering bonds are:

Step 1: The enterprise sends 01 set of bond offering documents to the State Securities Commission.

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 2: After the State Securities Commission approves, the enterprise discloses information before the offering and organizes the bond issuance. The proceeds from the offering must be transferred to a blocked account opened at a bank or foreign bank branch.

Step 3: Within 10 days from the date of completion of the offering, the enterprise reports the offering results according to the form in Appendix III issued with this Decree, accompanied by confirmation from the bank or foreign bank branch where to open an escrow account for the proceeds to the State Securities Commission.

Within 03 working days from the date of receiving the full offering results report, the State Securities Commission notifies the issuing enterprise and at the same time posts it on the website of the State Securities Commission on receipt of the offering results report.

Step 4: After the State Securities Commission announces receipt of the offering results report, the issuing enterprise releases the proceeds from the offering.

Step 5: Issuing businesses register and deposit bonds.

Bond offering process according to the provisions of law
Bond offering process according to the provisions of law

What does the bond offering process consulting service at Long Phan include?

At Long Phan, consulting services on the bond offering process include:

  • Consulting on bond issuance strategies helps businesses determine capital mobilization goals and develop effective issuance plans.
  • Consulting on the standard bond offering process according to current regulations.
  • Instructions for preparing legal and financial documents including necessary documents for bond offerings.
  • Consulting on determining bond value and interest rate to suit financial capacity and attract investors.
  • Representatives work with regulatory agencies, including filing applications and ensuring full compliance with legal regulations.
  • Advise on legal and tax issues throughout the bond issuance process and advise on tax issues related to the bond offering.

Benefits of using bond offering process consulting services at Long Phan

Bond offering process consulting services at Long Phan provide comprehensive solutions, helping businesses issue bonds effectively and quickly. Using our services, you will receive:

  • Optimize capital mobilization strategy;
  • Ensure compliance with legal procedures and legal regulations;
  • Enhance credibility and trust with investors;
  • Minimize legal and financial risks;
  • Save time and costs;
  • Reasonable service costs.

In order for the bond offering process to take place quickly and smoothly, businesses must meet all conditions and procedures as prescribed by law. Your business can consider using our bond-offering process consulting service. Long Phan is committed to providing you with reputable consulting services, thereby optimally achieving your financial goals. Please contact us via hotline 0906735386 to receive detailed and dedicated advice!