1. Concept and Role of Corporate Bonds
Corporate bonds are understood as a type of security with a term of 1 year or more, issued by enterprises to raise capital (Clause 1, Article 4 of Decree 153/2020/ND-CP). These bonds represent the enterprise’s commitment to debt repayment and guarantee the lawful rights of bondholders. The purpose of bond issuance is to implement the enterprise’s investment programs/projects; increase operating capital and restructure the enterprise’s debts.
According to Tin nhanh chứng khoán, in May 2025, the value of maturing corporate bonds from non-bank sectors doubled compared to April, reaching VND 11,400 billion; real estate accounted for 31%. Bond maturity pressure is expected to peak in Q3/2025. Bond interest in May rose sharply (VND 5,000 billion), with real estate continuing to account for a large proportion. Several major real estate enterprises have maturing bonds but have not disclosed information or have violated debt repayment obligations, including Quang Thuan, Hoang Phu Vuong, Sun Valley, My, Trung Nam Land, Thien Phuc, Saigon Glory, and Phu Quoc Tourism.
2. Conditions for Bond Issuance
| Criteria | Domestic Bond Issuance (Article 9, Decree No. 153/2020/ND-CP) | International Bond Issuance (Article 25, Decree No. 153/2020/ND-CP) |
| Issuing Entity | Joint stock company or limited liability company | |
| Type of Bonds | Non-convertible, without warrantsConvertible or with warrants | |
| Issuance Plan | Must be approved | Must be approved in accordance with regulations applicable to international markets |
| Financial Condition | Full payment of principal, interest, and due debts in the past 3 years (except when offering to financial institutions as creditors) | Compliance with financial safety ratios and regulations on foreign borrowing and repayment |
| Financial Safety Ratio | Must comply with industry-specific regulations | |
| Financial Statements | Most recent annual report must be audited by a qualified auditing firm | Not legally required, but typically necessary under international market practices |
| Eligible Investors | Offering must be made to eligible entities as prescribed | Offering must comply with regulations of the issuance market |
| Convertible/Warrant Bonds Offering | Applicable to joint stock companies onlyMinimum interval between offerings is 6 monthsMust comply with foreign ownership limits | |
| Foreign Exchange Regulations | Not specified | Must comply with regulations on foreign borrowing, repayment, and foreign exchange management (registration with the State Bank of Vietnam if bond issuance is considered foreign borrowing) |
3. Bond Issuance Process
The bond issuance process includes: Article 11 of Decree 153/2020/ND-CP as amended by Clause 8, Article 1 of Decree 65/2022/ND-CP
3.1 Offering process for non-convertible bonds:
1. Prepare offering documents. (Article 12 of Decree No. 153/2020/ND-CP as amended by Clause 9 Article 1 of Decree No. 65/2022/ND-CP)
2. Disclose information before offering.
3. Organize bond offering, complete distribution within 30 days from disclosure.
4. Register and deposit bonds as prescribed.
3.2 Offering process for convertible bonds and bonds with warrants:
1. Prepare documents, including:
- Same documents as non-convertible bond offering dossier;
- Offering registration form as per template;
- Shareholders’/Board resolution approving offering dossier;
- Commitment of no cross-ownership violation at time of conversion/warrant exercise.
2. Submit dossier to State Securities Commission (SSC)
- Submit 01 set of documents.
- SSC responds within 10 days (approval or rejection with reasons in writing).
3. Disclose information and organize offering
- Disclose information after SSC approval.
- Collected proceeds must be transferred to escrow account at a bank (as required).
4. Report on offering result
- Within 10 days from end of offering, submit result report with bank confirmation.
- SSC responds within 3 working days and publishes on website.
5. Release proceeds after SSC confirmation.
6. Register and deposit bonds as prescribed.
4. Obligations of Issuing Enterprises
4.1 Issuing enterprises have the following key obligations: (Article 34 of Decree 153/2020/ND-CP supplemented by Clause 23, Article 1 of Decree 65/2022/ND-CP)
- Comply with the Decree’s regulations on bond offerings.
- Manage and use capital in accordance with the approved plan and legal regulations.
- Fully and timely repay principal and interest, and fulfill associated bondholder rights (if any).
- Be responsible for the accuracy, truthfulness, and completeness of documents and disclosed information; comply with finance, accounting, statistics, and auditing regulations.
- Be subject to administrative penalties or criminal liability if violating regulations.
- Clearly explain to investors about issuance plan, risks, rights, interests, and legal responsibilities.
- Conduct mandatory early bond buyback as prescribed in Clause 3, Article 7 of the Decree.
4.2 Financial Reporting and Information Disclosure Obligations:
1. Before listing (Articles 29–31 of Decree No. 153/2020):
- Pre-offering disclosure: Information must be disclosed at least 1 day before the bond issuance.
- Post-offering disclosure: Information on bond offering results must be disclosed within 10 days from the completion date of the offering.
- Periodic disclosure: Information must be disclosed semi-annually and annually until the bonds mature.
- Semi-annual disclosure: Within 60 days from the end of the first 6 months of the fiscal year.
- Annual disclosure: Within 90 days from the end of the fiscal year.
- The disclosed information will be collected and compiled for publication and reporting on the situation of corporate bond issuances in international markets.
2. After listing (Article 128 of Decree No. 155/2020):
- The company must report to the State Securities Commission and disclose information within 24 hours from the occurrence of any of the following events:
- Official submission of listing registration documents;
- Receipt of a decision approving or rejecting the listing;
- Decision on delisting.
- The company must disclose information as required by both foreign and Vietnamese laws.
- If there are differences between the disclosure regulations of different jurisdictions, such differences must be reported to the State Securities Commission.
- All disclosed information must also be published in Vietnamese.
- In cases where the organization is listed simultaneously in both domestic and foreign stock markets, periodic financial reports must be prepared along with explanations of the differences between accounting standards.
5. Legal Risks and Preventive Measures
5.1 Key legal risks:
1. Administrative penalties
a. Violations related to information disclosure (Article 42 of Decree No. 156/2020/ND-CP, as amended by Article 1 of Decree No. 128/2021/ND-CP):
- Failure to disclose information as required: subject to a fine ranging from VND 70 million to VND 100 million.
- Disclosure of false information or concealment of the truth: subject to a fine ranging from VND 100 million to VND 300 million.
b. Violations related to issuance dossiers (Article 8 of Decree No. 156/2020/ND-CP):
- Preparing or certifying bond offering/issuance documents containing false or misleading information or concealing the truth: subject to a fine ranging from VND 400 million to VND 500 million.
- Forging documents or using forged confirmations to falsely prove eligibility for offering/issuance: subject to a fine ranging from VND 1 billion to VND 1.5 billion.
c. Violations related to bond registration and depository (Article 8 of Decree No. 156/2020/ND-CP): Failure to register or deposit bonds, or failure to do so within the prescribed time: subject to a fine of up to VND 100 million.
2. Criminal liability
Depending on the severity and nature of the offense, the enterprise may be charged with the following crimes:
- Deliberate disclosure of false or concealed information in securities activities (Article 209): Fine from VND 100 million to VND 2 billion; non-custodial reform for up to 2 years, or imprisonment from 3 months to 5 years.
- Using insider information for securities trading (Article 210): Fine from VND 500 million to VND 5 billion; imprisonment from 6 months to 7 years.
- Market manipulation (Article 211): Fine from VND 500 million to VND 4 billion; imprisonment from 6 months to 7 years.
- Forging documents in securities offering or listing dossiers (Article 212): Fine from VND 500 million to VND 5 billion; imprisonment from 6 months to 7 years.
5.2 Preventive measures:
- Strictly comply with issuance conditions and procedures.
- Disclose information transparently, accurately, and completely.
- Use capital for the intended purpose, report periodically.
- Fulfill obligations to bondholders, especially in payment.
- Control collateral assets, conduct valuation, and register secured transactions in accordance with regulations.
6. Market Development Trends
The corporate bond market is showing positive changes as:
- Issuance scale increases sharply: In 2024, total corporate bond issuance value reached about VND 443,700–472,000 billion, up nearly 27–40% from the previous year.
- Banks lead the market: The banking sector accounts for about 70% of issuance, while real estate only accounts for 17%.
- Interest rates and tenors diverge: Bank bond interest rates decrease (~5.6%), real estate increases (~10.4%). Average tenor rises to 4 years.
- Greater transparency and stricter oversight: Requires credit rating, collateral under amended Securities Law from 2025. Proportion of “below average” issuers reduced to 25%.
- High maturity pressure in 2025: Total maturing bond value estimated at VND 151,000 billion, mainly in real estate.
- Long-term goal: Target outstanding corporate bonds to reach 20% of GDP by 2025, and 25% by 2030.
7. Conclusion
Bond issuance is an important capital mobilization tool for enterprises. Mastering legal regulations and strict compliance will help businesses successfully issue bonds while protecting investors’ rights.
Harley Miller Law Firm
- Email: [email protected]
- Website: hmlf.vn
- Hotline: + 84 9372 15585