ENTERPRISES ISSUING BONDS TO THE PUBLIC MUST UNDERGO CREDIT RATING
On August 14, 2017, the Prime Minister approved the bond market development roadmap during 2017-2020, with a vision toward 2030 at the Decision No. 1191/QD-TTg; within that the most important content is the regulations on enterprise bond’s development.
On the plan of creating favorable conditions for enterprises to raise funds through bond issuance and increase openness and transparency in the process of raising funds through bond issuance, this roadmap has plan to devise a mechanism to permit bond-issuing enterprises to issue bonds in different drives to raise funds according to project implementation schedule.
At the same time, to review the conditions on private placement of corporate bonds toward requiring information disclosure, permitting only professional investors to invest in privately issued corporate bonds and requiring these bonds to be registered and deposited in a centralized manner; To consider requiring enterprises issuing bonds to the public to undergo credit rating when there are at least two qualified rating enterprises operating in the domestic market.
The objectives prescribed in this roadmap includes the outstanding balance of the bond market will reach around 45% of GDP by 2020 and some 65% of GDP by 2030, with the outstanding balance of the market of government bonds, government-guaranteed bonds and municipal bonds to reach about 38% by 2020 and approximately 45% of GDP by 2030, and that of the market of corporate bonds to reach about 7% of GDP by 2020 and around 20% of GDP by 2030. The average maturity term of domestically issued government bonds will be 6-7 years during 2017-2020 and 7-8 years during 2021-2030.
This Decision takes effect on the signing date.
