Corporate Bond Issue Requires At Least 20 Pct of Owner’s Equity

When a company issues corporate bonds to raise funds for its investment projects and programmes, it must have at least 20 percent of owner’s equity in such projects and programmes, according to the Decree No. 90/2011/ND-CP dated October 14, 2011.

 

Corporate bonds come in three types: Non-convertible bonds; convertible bonds; and bonds issued in the form of certificates, book-entry or electronic data. Corporate bonds will have a maturity from one year onwards and have par value of at least VND100,000 or multiple of VND100,000.

 

To issue non-convertible bonds, the company must operate at least one year dating from the date of official operation; must have profit in the preceding fiscal year to the year of issue; must satisfy capital adequacy ratio and other regulations, etc.

 

To issue convertible bonds or bonds with warrants, in addition to aforesaid conditions, the issuing company must satisfy other conditions like foreign holdings.