Originally published September 3, 2010 Keywords: draft decree, issuance, Government
bonds, Ministry of Finance, MOF A decree on issuance of Government bonds, Government-guaranteed
bonds and local administrations' bonds has been drafted
("Draft Decree") to provide guidelines on implementation
of the Law on Public Debt Management adopted by the National
Assembly of Vietnam in June 2009. This Legal Update highlights some key points of the Draft
Decree. The Draft Decree provides for the issuance of Government bonds,
Government-guaranteed bonds and local administrations'
bonds. Government bonds mean bonds issued by the Ministry of Finance
("MOF") to raise funds for the State budget or to raise
funds for a specific investment program or project within the
investment scope of the State. Government bonds comprise: Government-guaranteed bonds mean bonds with a term of at least
one year, issued by an enterprise to raise funds for an investment
project as instructed by the Prime Minister and guaranteed by the
Government. Local administrations' bonds mean bonds with a term of at
least one year, which are issued by or the issuance of which is
authorised by a provincial or municipal People's Committee to
raise funds for construction works or an investment project of the
locality. The issuer of Government bonds is the MOF. The issuer of Government-guaranteed bonds is a shareholding
company, a limited liability company or a State company in the
process of conversion into a shareholding company or a limited
liability company a policy bank of the State or a financial or
credit institution carrying out a State credit program. The issuer of local administrations' bonds is a provincial
or municipal People's Committee. Bonds are issued and paid in Vietnamese Dong or in freely
convertible foreign currencies. The currency used for payment of
bonds is the currency used upon issuance. Forms of issuance Bonds may be issued in the form of certificates, a book-entry or
as electronic data. Face value of bonds The face value of bonds which are issued and paid in Vietnamese
Dong have a minimum face value of VND 100,000. Other face values
may be multiples of VND 100,000. The face value of bonds which are issued and paid in foreign
currencies will be stipulated specifically for each issue. Bond purchasers Bond purchasers are Vietnamese organisations and individuals and
foreign organisations and individuals. Vietnamese organisations are
not permitted to use sources of expenditure granted by the State
Budget to buy bonds. Listing and transactions of bonds Bonds may be listed on the Stock Exchange. Treasury bills are transacted in the money market in accordance
with the provisions of current laws. Rights of bondholders Bondholders are guaranteed by the bond issuer of full and timely
payment of bond principal and interest upon their maturity. Bondholders are entitled to assign, donate, bequeath, discount
and pledge their bonds as stipulated by law. The issuance of Government bonds on international markets is
allowed when: The issuance of Government-guaranteed bonds on international
markets is allowed when, among other things, the following
conditions are satisfied: Issuance file An issuance file means the legal documents which the issuer,
jointly with the lead underwriter and legal consultants, prepares
pursuant to international law and Vietnamese law. Such file contains the following main documents: State regulators The State regulators include the MOF, the State Bank of Vietnam,
the Ministry of Planning and Investment , the Ministry of Justice
and the municipal or provincial People's Committee issuing
local administrations' bonds. Learn more about our
Vietnam offices and
Corporate & Securities practice. Visit us at
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and/or Mayer Brown LLP. All rights reserved. Mayer Brown is a
global legal services organization comprising legal practices that
are separate entities ("Mayer Brown Practices"). The
Mayer Brown Practices are: JSM, a Hong Kong partnership, and its
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and Mayer Brown LLP, a limited liability partnership established in
the United States. The Mayer Brown Practices are known as Mayer
Brown JSM in Asia. This article provides information and comments on legal
issues and developments of interest. The foregoing is not a
comprehensive treatment of the subject matter covered and is not
intended to provide legal advice. Readers should seek specific
legal advice before taking any action with respect to the matters
discussed herein. Please also read the JSM legal publications Disclaimer.
, Toby Nicholas Rees and
Phu Thinh Dan 
Governing scope
Bond issuers
Issuance and payment currency
Issuance of bonds on international markets
ARTICLE
3 September 2010
Draft Decree on Issuance of Government Bonds
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A decree on issuance of Government bonds, Government-guaranteed bonds and local administrations' bonds has been drafted ("Draft Decree") to provide guidelines on implementation of the Law on Public Debt Management adopted by the National Assembly of Vietnam in June 2009.