ANTD.VN - On the afternoon of November 28, Deputy Minister of Finance Nguyen Duc Chi chaired a meeting to assess the implementation of Decree No. 08/2023/ND-CP and policy orientations in the coming time.
The corporate bond market has gradually stabilized.
Faced with the difficult situation of the corporate bond market, the Government issued Decree No. 08/2023/ND-CP (Decree 08) postponing a number of provisions in Decree No. 65/2022/ND-CP (Decree 65) until December 31, 2023.
Decree 08 stipulates that enterprises can negotiate with bondholders to pay the principal and interest of due bonds with other assets; bonds issued before Decree 65 took effect can be negotiated to extend the term to a maximum of 02 years;
At the same time, the implementation of 03 provisions of Decree 65 on determining professional securities investors as individuals who purchase individual corporate bonds, mandatory credit rating and reducing bond distribution time will be suspended until December 31, 2023.
According to Mr. Nguyen Hoang Duong - Deputy Director of the Department of Finance of Banks and Financial Institutions (Ministry of Finance), the issuance of Decree 08 has helped businesses have more time to deal with the immediate difficulties related to bonds. In addition, the Ministry of Finance regularly monitors and urges businesses to pay bond debts; strengthens inspection, supervision, correction and handling of violations. Communication work has also been enhanced to restore investor confidence.
As a result, the market has gradually stabilized since the second quarter of 2023. Since Decree 08 took effect until November 3, 2023, 68 enterprises have issued private bonds with a volume of VND 189.7 trillion. The outstanding balance of private corporate bonds at the end of October 2023 was about VND 1 million billion, accounting for 10.5% of GDP in 2022, equal to 8% of the total outstanding credit of the economy.
Discussing the provisions of Decree 08 on payment of principal and interest of bonds with other assets and the bonds issued before Decree 65 took effect were negotiated to extend the maximum term to no more than 02 years, representatives of the Finance Department of banks and financial institutions said that according to the provisions of Decree 08, these policies will continue to be implemented in the following period.
Recently, businesses have had liquidity difficulties, leading to the possibility of late payment of principal and interest on corporate bonds. Therefore, businesses have proactively negotiated with investors to pay principal and interest on bonds with other assets (mainly real estate products); extend the bond term or change other terms and conditions of the bond (change the time, method, and frequency of payment of principal and interest on bonds). Up to now, many businesses that are late in payment have had plans to negotiate with investors.
This policy in Decree 08 is one of the legal bases for businesses to negotiate with investors to restructure bond debts, reduce debt repayment pressure, thereby giving businesses time to adjust their scale of operations, restore production and business to create cash flow to repay debts.
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Deputy Minister of Finance Nguyen Duc Chi chaired the meeting. |
No extension of validity of some provisions
At the meeting, the Ministry of Finance received 13 comments from ministries, central agencies, and associations attending the meeting... In which, the majority of delegates agreed with the proposal of the Ministry of Finance that it is not necessary to extend the suspension of the implementation of the regulation defining professional securities investors as individuals who buy individual corporate bonds.
According to the Ministry of Finance's explanation, Decree 65 stipulates that professional securities investors are individuals who must ensure that their portfolio holdings have an average value of at least VND 2 billion within 180 days using the investor's assets, excluding loans. In order to maintain the demand for corporate bond purchases of individual investors with financial potential but who have not accumulated enough time for 180 days, Decree 08 suspends the implementation of the above regulation until December 31, 2023.
Up to now, after more than 8 months of implementing Decree 08, professional individual securities investors have accumulated enough time of 180 days to meet the regulations in Decree 65, so there is no need to extend the suspension of the implementation of this regulation.
Along with that, the Ministry of Finance also proposed not to extend the suspension period of mandatory credit rating regulations for individual corporate bonds.
Previously, the suspension of credit rating regulations until the end of 2013 was due to the context of enterprises having difficulty raising capital, while credit rating implementation took a certain amount of time and increased the issuance costs of enterprises; in addition, at that time, there were only 02 licensed credit rating enterprises on the market.
According to the Ministry of Finance, from January 1, 2023, corporate bonds offered to the public have implemented regulations on credit ratings for offerings that require credit ratings. However, enterprises issued to the public in 2023 are not subject to mandatory credit ratings.
Similar to bonds issued to the public, if the provisions of Decree 65 are applied, only a few cases that meet all the conditions will be required to have a credit rating. Therefore, the Ministry of Finance believes that continuing to implement the provisions of Decree 65 will not cause any problems.
In addition, the Ministry of Finance has also licensed 01 more enterprise, the total number of enterprises that can provide credit rating services is 03 out of the maximum allowed number of 05 credit rating enterprises, of which 1 enterprise has a joint venture with an international credit rating organization.
In addition, the Ministry of Finance also believes that it is not necessary to extend the suspension of the implementation of the regulation reducing the time for bond distribution (from 90 days to 30 days).
The Ministry believes that, to date, market liquidity has stabilized. To limit the situation where businesses take advantage of distribution and invite small individual investors who are not professional securities investors to participate in buying bonds, it is not necessary to extend the suspension of this regulation.
Speaking at the meeting, Deputy Minister of Finance Nguyen Duc Chi said that the Ministry of Finance will absorb both opinions related to the above proposals and carefully consider them to come up with a plan that best suits the actual situation.
To continue stabilizing and developing the corporate bond market, the Ministry of Finance has reported to the Government leaders a series of comprehensive solutions.
Regarding medium and long-term solutions on mechanisms and policies, the Ministry of Finance has reported to the Government leaders for a comprehensive review, research and report to competent authorities to amend regulations on private issuance of corporate bonds and related persons (in the Securities Law, Enterprise Law and related Laws).
If necessary, recommend that competent authorities issue a Law amending and supplementing a number of Laws to promptly handle legal problems in the corporate bond market.
At the same time, review, complete and improve the effectiveness of implementing legal regulations on corporate bankruptcy so that enterprises have sufficient procedures to carry out bankruptcy in an orderly manner.
The Ministry of Construction is researching and submitting to competent authorities to supplement regulations on financial safety indicators in the construction and real estate sectors.
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