THE MAXIMUM TERM OF SPECIAL BONDS IS 10 YEARS
On December 31, 2019, the State Bank of Vietnam promulgates the Circular No. 32/2019/TT-NHNN on amending and supplementing a number of Articles of the Circular No. 19/2013/TT-NHNN dated September 6, 2013 of the State Bank of Vietnam’s Governor providing the purchase, sale and settlement of bad debts by Vietnam Asset Management Company.
In accordance with this Circular, the term of special bonds shall be determined according to the agreement between the Vietnam Asset Management Company and the credit institution selling debts and shall be at least 01 year. If the amount of debt recovery is not enough to pay the bonds when the bonds are due, the Vietnam Asset Management Company shall decide to extend the term of the bonds, not exceeding 03 years. The extension of the bond term that exceeds 03 years must be approved by the bond owner. It’s not allowed to extend the term of bonds being used to participate in the open market operation.
The maximum term of special bonds is 05 years. In case of issuing special bonds to purchase bad debts of credit institutions that are implementing restructuring plans or facing financial difficulties, the term of special bonds shall not exceed 10 years. Such bonds are exempt from the depositing charge at the State Bank and shall be used in the refinancing and open market operations in accordance with law.
This Circular takes effect on February 14, 2020.
