Ministry of Finance has recently issued Circular 211 guiding Decree 90/2011/ND-CP of the Government on issuing corporate bonds. Circular 211 shall take effect on 20 January 2013.

Circular 211 provides specific provisions on terms and conditions of corporate bonds. Particularly, the issuer must publish the terms and conditions of the bonds in accordance with “the requirements of the relevant bonds market”. However, under Decree 90, the terms and conditions of the bonds are not compulsory in the set of documents for bond issuance. Due to this contradiction, it is questionable on how the bond issuers shall comply with the requirement under Circular 211.

Circular 211 allows issuers to issue bonds in several tranches. On the other hand, it is required that all the tranches must be within 12 months. Otherwise, the issuer must apply for a separate issuance for the bonds to be issued beyond the year in which the first tranche occurred.

It should be noted that there was no such limitation for corporate bonds previously.

Circular 211 requires that credit institutions and securities companies must be permitted to act as issuing agents/underwriters in a bond issuance. However, credit institutions/securities companies are only permitted to conduct the operations expressly recognized in their operating license. Normally, the operating license of commercial banks/securities companies does not specifically such activities as acting as issuing agents/underwriters in a bond issuance. Therefore, it would be a big concern for the implementation of this requirement in practice.

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