On the afternoon of November 28, the Ministry of Finance held a meeting to evaluate Decree 08 on private offering and trading of bonds.
According to the Ministry of Finance, after a number of controversies related to the bond market, in early 2023, the Government issued Decree 08 to neutralize the legitimate interests of bond-issuing enterprises and bond-buying investors in the spirit of "harmonious interests and shared difficulties", supporting bond-issuing enterprises to mobilize capital, pay due debt obligations to investors and continue production and business activities.
Overview of the meeting. (Photo: Organizing Committee)
Decree 08 stipulates that enterprises can negotiate with bondholders to pay the principal and interest of bonds due with other assets. At the same time, the Decree also allows enterprises to negotiate to extend the term to a maximum of 2 years.
Mr. Nguyen Hoang Duong, Deputy Director of the Department of Finance for Banks and Financial Institutions (Ministry of Finance) said that from the second quarter of 2023 up to now, the corporate bond market has gradually stabilized again.
From the date Decree 08 took effect to November 3, 2023, according to data monitored by the Hanoi Stock Exchange, there were 68 enterprises issuing private shares with a volume of VND 189,700 billion.
Outstanding individual corporate bonds at the end of October 2023 is about 1 million billion VND, accounting for 10.5% of GDP in 2022, equal to 8% of the total outstanding credit of the economy.
According to Mr. Duong, recently, businesses have had liquidity difficulties leading to the possibility of late payment of principal and interest on corporate bonds. They have proactively negotiated with investors to pay principal and interest on bonds with other assets (mainly real estate products), extend bond terms or change other conditions and terms of bonds (changes in time, method, and frequency of payment of principal and interest on bonds).
"Up to now, many businesses that are slow to pay have had plans to negotiate with investors," Mr. Duong said.
Mr. Nguyen Hoang Duong, Deputy Director of the Department of Finance of Banks and Financial Institutions (Ministry of Finance). (Photo: BTC)
This policy in Decree 08 is one of the legal bases for businesses to negotiate with investors to restructure bond debts, reduce debt repayment pressure, thereby giving businesses time to adjust their scale of operations, restore production and business to create cash flow to repay debts.
Mr. Nguyen Duc Chi, Deputy Minister of Finance, emphasized: The Ministry will strive to build a bond market in general and individual corporate bonds in particular to develop sustainably.
To continue stabilizing and developing the corporate bond market, the Ministry of Finance has reported to the Government leaders a series of comprehensive solutions.
Regarding medium and long-term solutions on mechanisms and policies, the Ministry of Finance has reported to the Government leaders for a comprehensive review, research and report to competent authorities to amend regulations on issuance of individual corporate bonds and related persons (in the Securities Law, Enterprise Law and related Laws).
If necessary, recommend that competent authorities issue a Law amending and supplementing a number of Laws to promptly handle legal problems in the corporate bond market.
The Ministry of Finance will review, complete and improve the effectiveness of implementing legal regulations on corporate bankruptcy so that enterprises have sufficient procedures to carry out bankruptcy in an orderly manner.
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