Skip to main content

  • AddRemove
  • Build a Report 
Legal Update

Draft Decree on Issuance of Government Bonds

3 September 2010
Mayer Brown JSM Legal Update

A decree on issuance of Government bonds, Government-guaranteed bonds and local administrations' bonds has been drafted ("Draft Decree") to provide guidelines on implementation of the Law on Public Debt Management adopted by the National Assembly of Vietnam in June 2009.

This Legal Update highlights some key points of the Draft Decree.

Governing scope

The Draft Decree provides for the issuance of Government bonds, Government-guaranteed bonds and local administrations' bonds.

Government bonds mean bonds issued by the Ministry of Finance ("MOF") to raise funds for the State budget or to raise funds for a specific investment program or project within the investment scope of the State. Government bonds comprise:

  1. Treasury bills;
  2. Treasury bonds;
  3. Foreign currency bonds; and
  4. Public bonds for national construction.

Government-guaranteed bonds mean bonds with a term of at least one year, issued by an enterprise to raise funds for an investment project as instructed by the Prime Minister and guaranteed by the Government.

Local administrations' bonds mean bonds with a term of at least one year, which are issued by or the issuance of which is authorised by a provincial or municipal People's Committee to raise funds for construction works or an investment project of the locality.

Bond issuers

The issuer of Government bonds is the MOF.

The issuer of Government-guaranteed bonds is a shareholding company, a limited liability company or a State company in the process of conversion into a shareholding company or a limited liability company a policy bank of the State or a financial or credit institution carrying out a State credit program.

The issuer of local administrations' bonds is a provincial or municipal People's Committee.

Issuance and payment currency

Bonds are issued and paid in Vietnamese Dong or in freely convertible foreign currencies. The currency used for payment of bonds is the currency used upon issuance.

Forms of issuance

Bonds may be issued in the form of certificates, a book-entry or as electronic data.

Face value of bonds

The face value of bonds which are issued and paid in Vietnamese Dong have a minimum face value of VND 100,000. Other face values may be multiples of VND 100,000.

The face value of bonds which are issued and paid in foreign currencies will be stipulated specifically for each issue.

Bond purchasers

Bond purchasers are Vietnamese organisations and individuals and foreign organisations and individuals. Vietnamese organisations are not permitted to use sources of expenditure granted by the State Budget to buy bonds.

Listing and transactions of bonds

Bonds may be listed on the Stock Exchange.

Treasury bills are transacted in the money market in accordance with the provisions of current laws.

Rights of bondholders

Bondholders are guaranteed by the bond issuer of full and timely payment of bond principal and interest upon their maturity.

Bondholders are entitled to assign, donate, bequeath, discount and pledge their bonds as stipulated by law.

Issuance of bonds on international markets

The issuance of Government bonds on international markets is allowed when:

  • The project using funds from the issuance of international bonds is a key national project;
  • The conditions specified in the Government’s resolution on issuance of international bonds are satisfied;
  • Legal dossiers of international bond issuance have been completed pursuant to Vietnamese law and international practice;
  • International market conditions are favourable;
  • The bond issuance plan has been evaluated and approved by the competent authorities;
  • The value of issued bonds falls within the total foreign commercial debt approved by the Prime Minister.

The issuance of Government-guaranteed bonds on international markets is allowed when, among other things, the following conditions are satisfied:

  • The plan for bond issuance has been assessed and approved by the competent authorities;
  • The bond issuance plan has been evaluated and approved by the competent authorities;
  • The value of issued bonds falls within the total foreign commercial debt approved by the Prime Minister.
  • The financial statements for the most three recent years audited by an independent auditing company show no losses and no outstanding debts.

Issuance file

An issuance file means the legal documents which the issuer, jointly with the lead underwriter and legal consultants, prepares pursuant to international law and Vietnamese law.

Such file contains the following main documents:

  • Prospectus;
  • Underwriting contracts;
  • Legal consultancy contracts;
  • Contract for purchase and sale of bonds;
  • Agency contracts; and
  • Other documents as required by the relevant international finance market.

State regulators

The State regulators include the MOF, the State Bank of Vietnam, the Ministry of Planning and Investment , the Ministry of Justice and the municipal or provincial People's Committee issuing local administrations' bonds.

For inquiries related to this Legal Update, please contact:

Dao Nguyen ( )

Toby Nicholas Rees ( )

Thinh Dan ( )

Learn more about our Vietnam offices and Corporate & Securities practice.

The Build a Report feature requires the use of cookies to function properly.  Cookies are small text files that are placed on your computer by websites that you visit. They are widely used in order to make websites work, or work more efficiently.  If you do not accept cookies, this function will not work.  For more information please see our Privacy Policy

You have no pages selected. Please select pages to email then resubmit.