Decree No. 01/2011/ND-CP On the issuance of government bonds, government-guaranteed bonds, and local government bonds

DECREE

Regarding the issuance of government bonds, government-guaranteed bonds, and local government bonds,

 guaranteed by the Government,

 _______________________

THE GOVERNMENT

Pursuant to the Law on Organization of the Government dated December 25, 2001;

Pursuant to the Law on State Budget dated December 16, 2002;

Pursuant to the Law on Public Debt Management dated June 17, 2009;

Based on the Foreign Exchange Ordinance dated December 21, 2005;

Considering the proposal of the Minister of Finance,

DECREE:

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

This Decree stipulates the issuance of government bonds, government-guaranteed bonds, and local government bonds.

Article 2. Interpretation of Terms

In this Decree, the following terms are understood as follows:

1. "Government bond" means a type of bond issued by the Ministry of Finance to raise funds for the state budget or to raise funds for specific investment programs or projects within the scope of state investment.

2. "Government-guaranteed bond" means a type of bond issued by enterprises, financial organizations, credit institutions, or state policy banks as specified in Article 32 of the Public Debt Management Law, which are guaranteed by the Government for payment.

3. "Local government bond" means a type of bond issued by the People's Committee of provinces or centrally governed cities (hereinafter referred to as the provincial People's Committee) to raise funds for local investment projects or works.

4. "Retail issuance of bonds" means the issuance of bonds where the issuer directly sells bonds to individual purchasers.

5. "Guaranteed issuance of bonds" means the method of issuing bonds where the issuer sells bonds through guarantors.

6. "Prospectus" means a document or electronic data publicly disclosing accurate, truthful, and objective information related to the offering or listing of bonds by the issuer and the terms and design of the bond issuance.

7. "Agency agreements" mean agreements signed between the issuer and agencies regarding the terms to execute transactions from the preparation of issuance to the completion of bond payment, including:

a) Printing agency: an organization selected to print bonds, prospectuses, and other related documents;

b) Listing agency: an organization selected to handle the registration of the issuer's bonds for listing on appropriate stock markets in accordance with the listing regulations;

c) Financial and settlement agency: an organization selected to act on behalf of the issuer to pay principal and interest on bonds to investors and manage the list of bondholders for the issuance;

d) Transfer agency: an organization selected to maintain reports on bondholders, cancel and issue certificates, and handle issues arising from lost, damaged, or stolen certificates;

đ) Trustee agency: an organization designated by bondholders to represent their interests and ensure compliance with bond terms;

e) Depository organization: an organization that accepts deposits, preserves, confirms transfers, and transfers bonds on the market.

8. "Bond issuance agency" means the issuance of bonds where the issuer entrusts another organization to sell bonds to purchasers.

9. "Bid issuance of bonds" means the method of issuing bonds where the issuer selects qualified organizations to bid and purchase bonds meeting the issuer's requirements.

10. "Credit rating factor" means a factor determined by credit rating organizations to assess countries (national credit rating) or enterprises (enterprise credit rating) regarding trustworthiness, investment risk, and debt repayment capability.

11. "Guarantee issuance agreement" means an agreement signed between the issuer and the bond issuance guarantor or guarantor group regarding the terms and conditions for guaranteeing issuance or executing issuance for each issuance period or issuance program.

12. "Legal advisory agreement" means an agreement signed between the issuer and the bond issuance guarantor or guarantor group with one or more law firms to provide domestic, foreign, or international legal advisory services.

13. "Bond swap" means the purchase and sale of two different bond codes of the same issuer at the same time with the aim of restructuring the debt portfolio.

14. "Primary Guarantor or Main Registrar Organization" means one or a group of reputable financial organizations chosen by the issuer to conduct transactions and play a key role in distributing bonds. The primary guarantor or main registrar organization advises on optimal issuance structure, provides reference prices, suitable issuance times, and coordinates with all parties to create good momentum for the transaction.

16. "Re-borrower" means an enterprise, financial organization, credit institution, or provincial People's Committee that enters into a re-lending agreement and receives debt from the lending agency to use the proceeds from the issuance of government bonds under the re-lending mechanism.

17. "Issuance of bonds" means the sale of bonds by the issuer to purchasers.

18. "Bond issuance guarantor" means an organization that commits to the issuer to carry out procedures for bond issuance, purchase part or all of the issuer's bonds to resell or distribute to investors, or purchase remaining unsold bonds.

19. "Credit rating organization" means organizations with the function of assessing and ranking credit ratings for countries and enterprises.

20. "Domestic legal advisory" means a law firm with a commercial presence in Vietnam selected to advise the issuer or bond issuance guarantor or guarantor group on Vietnamese laws related to the bond issuance period.

21. "International legal advisory" means a law firm selected to advise the issuer or bond issuance guarantor or guarantor group on international laws, applicable laws at the bond issuance market, drafting prospectuses and legal opinions for the bond issuance period.

22. "Bond issuance guarantee consortium" refers to a collection of bond issuance guarantors selected by the issuer to participate in the bond issuance process. This consortium may be divided into multiple levels depending on the specific requirements of each issuance round:

a) Level one consists of the main guarantor or primary registrar, playing a key role in distributing the bonds; coordinating with the issuer to enhance the national image, corporate image, and continuing to support liquidity post-issuance;

b) Level two comprises the primary or co-primary registrar, playing a more limited role in allocating the volume of bond sales;

c) Level three includes the registrar or co-registrar, playing the lowest role within the bond issuance guarantee consortium.

23. "Legal opinion" is a legal document issued by the Ministry of Justice, domestic legal advisors, or international legal advisors in accordance with Vietnamese laws and international practices regarding the legal basis for transactions related to bond issuance and payment conducted under Vietnamese law, treaties, international agreements, foreign-element contracts, and other legal documents.

Article 3. Bond Issuers

1. The issuer of government bonds is the Ministry of Finance.

2. The issuer of government-guaranteed bonds is a business entity, state policy bank, or financial and credit organization that falls within the scope of government guarantees as stipulated in Article 32 of the Law on Public Debt Management.

3. The issuer of local government bonds is the People's Committee of the province.

Article 4. Purpose of Bond Issuance

1. Government bonds are issued for the following purposes:

a) Investment in economic and social development tasks within the central budget as prescribed by the State Budget Law;

b) To cover temporary deficits in the state budget through short-term bond borrowing;

c) To restructure government debt portfolios;

d) To provide loans to businesses, financial and credit organizations, and local governments according to legal provisions;

đ) Other purposes aimed at ensuring national financial security.

2. Government-guaranteed bonds are issued for investment in the following programs and projects:

a) Programs and projects for investment decided upon by the National Assembly or the Prime Minister, including restructuring plans for these programs and projects' debts;

b) High-tech application programs and projects, energy sector projects, mineral extraction and processing projects, or export-oriented production and service supply projects approved by the Prime Minister in line with the country's economic and social development orientation;

c) Programs and projects in areas and regions encouraged for investment by the Prime Minister's decision;

d) Targeted state credit programs implemented by the Vietnam Development Bank, the Vietnam Social Policy Bank, or financial and credit organizations based on the Government's or Prime Minister's decisions.

3. Local government bonds are issued for the following purposes:

a) Investment in economic and social development tasks within the local budget as prescribed by the State Budget Law;

b) Investment in projects with repayment capacity at the local level.

Article 5. Principles of Bond Issuance

1. Bond issuance must ensure transparency, fairness, and openness.

2. Bond issuance must comply with the provisions of this Decree and other relevant laws.

3. The issuer of bonds must ensure the proper management and effective use of bond capital for its intended purpose and arrange sufficient sources to repay debts on time.

Article 6. Conditions and Terms of Bonds

1. Term of Bonds

Except for Treasury bills issued by the Ministry of Finance, other types of government bonds, guaranteed government bonds, and local government bonds must have a term of one (01) year or longer. The Ministry of Finance will provide specific guidance on the term of bonds to ensure diversity and standardization of bond terms for the development of the bond market.

2. Volume of Bond Issuance

The volume of bonds issued in each tranche is decided by the issuer based on the capital usage needs approved by the competent authority and market conditions and the ability to raise funds.

3. Par Value of Bonds

The par value of bonds is determined by the issuer. In cases where bonds are listed on the securities exchange, the par value of bonds must be consistent with the listing and trading regulations of securities.

4. Currency for Issuance and Settlement of Bonds

a) Government bonds, guaranteed government bonds, and local government bonds issued domestically are denominated in Vietnamese dong. In cases where domestic government bonds are issued in freely convertible foreign currencies, they shall be carried out according to the project approved by the Prime Minister.

b) Government bonds and guaranteed government bonds issued in international markets are denominated in foreign currency according to the project approved by the competent authority as stipulated in this Decree.

c) The currency used for principal and interest repayment of bonds is the same as the currency at issuance.

d) The use of foreign currency as the currency for issuing and settling bonds must comply with the legal provisions on foreign exchange management.

5. Form of Bonds

a) Bonds may be issued in the form of certificates, book-entry records, or electronic data.

b) The issuer decides the specific form of bonds for each issuance tranche.

6. Interest Rate of Bonds

a) The interest rate of government bonds, guaranteed government bonds, and local government bonds issued domestically is determined by the issuer within the interest rate framework set by the Ministry of Finance.

b) Bonds can be issued at fixed interest rates, floating interest rates, and discount interest rates according to the issuance plan approved by the competent authority.

7. Repurchase and Exchange of Bonds

a) Early Redemption of Bonds

- The issuer may redeem bonds early to reduce debt obligations or to restructure debt according to the project approved by the competent authority as stipulated in this Decree and the legal provisions on public debt management.

- Early redemption of bonds must ensure transparency, fairness, and effectiveness.

b) Exchange of Bonds

- Issued government bonds may be exchanged to restructure debt according to the restructuring program and plan already approved by the competent authority as stipulated in this Decree and the legal provisions on public debt management.

- The exchange of guaranteed government bonds must be approved by the Ministry of Finance.

- The exchange of bonds must ensure transparency, fairness, and effectiveness.

Article 7. Subjects purchasing bonds

1. Subjects purchasing bonds are Vietnamese organizations and individuals, and foreign organizations and individuals.

2. Vietnamese organizations are not allowed to use funds provided by the state budget to purchase bonds.

Article 8. Rights and obligations to pay taxes of bondholders

1. Rights of bondholders

a) Bondholders are guaranteed full and timely payment when the principal and interest of the bonds mature.

b) Bondholders may use bonds for transfer, gift, inheritance, discounting, and collateral in credit relationships and civil relationships in accordance with current laws.

2. Obligations to pay taxes of bondholders

Bondholders shall fulfill their obligation to pay corporate income tax or personal income tax on income derived from interest on government bonds, bonds guaranteed by the government, and local government bonds, in accordance with current tax laws. The exemption from corporate income tax or personal income tax on income from interest on government bonds issued to the international market shall be decided by the Government.

Article 9. Registration, listing, and trading of bonds

1. For bonds issued domestically

a) Government bonds and bonds guaranteed by the government issued by state policy banks shall be registered and deposited at the Securities Depository Center; listed at the stock exchange in accordance with regulations of the Ministry of Finance; traded in the money market and at the stock exchange where the bonds are listed.

b) Local government bonds shall be registered and deposited at the Securities Depository Center; listed and traded at the stock exchange in accordance with regulations of the Ministry of Finance.

c) Bonds guaranteed by the government issued by enterprises shall be registered, deposited, listed, and traded on the securities market in accordance with securities laws.

2. For bonds issued to the international market

Government bonds and bonds guaranteed by the government shall be deposited at foreign depository organizations; listed and traded at foreign stock exchanges.

Chapter II

DOMESTIC BOND ISSUANCE

SECTION 1. GOVERNMENT BONDS

Article 10. Types of Government Bonds

1. Treasury bills are types of government bonds with terms of thirteen (13) weeks, twenty-six (26) weeks, or fifty-two (52) weeks, and the currency of issuance is the Vietnamese dong. Other terms of treasury bills are determined by the Ministry of Finance based on capital needs and market conditions but shall not exceed fifty-two (52) weeks.

2. National treasury bonds are types of government bonds with terms of one (01) year or longer, and the currency of issuance is the Vietnamese dong or freely convertible foreign currencies.

3. National construction bonds are types of government bonds with terms of one (01) year or longer, the currency of issuance is the Vietnamese dong, and they are issued to raise capital for investing in important national projects and other essential works serving production and living, thereby creating material and technical foundations for the country.

Article 11. Methods of Issuing Bonds

1. Treasury bills shall be issued through auction at the State Bank of Vietnam's trading venue or directly to the State Bank of Vietnam. The Ministry of Finance and the State Bank of Vietnam shall provide guidance on the procedures for issuing treasury bills. In cases where treasury bills are issued directly to the State Bank of Vietnam, the Ministry of Finance shall coordinate with the State Bank of Vietnam to submit to the Prime Minister for consideration and decision regarding each issuance period.

2. Government bonds shall be issued through the following methods:

a) Auction issuance of bonds.

b) Guarantee issuance of bonds.

c) Agency issuance of bonds.

d) Retail issuance of bonds.

The Ministry of Finance shall provide detailed guidance on the procedures for issuing government bonds.

Article 12. Participants in Auctions, Guarantees, and Agency Issuance of Bonds

1. Participants in auctions for treasury bills.

a) Participants in auctions for treasury bills are commercial banks, securities companies, financial companies, and other financial institutions.

b) If the participants specified in point a of Clause 1 of this Article do not purchase the entire volume of treasury bills in the issuance period, the State Bank of Vietnam may purchase part or all of the remaining volume of treasury bills in accordance with monetary policy objectives during each period after reaching an agreement with the Ministry of Finance.

2. Participants in auctions, guarantees, and agency issuance of government bonds and national construction bonds are commercial banks, securities companies, financial companies, the Vietnam Social Security, and other financial institutions.

3. Participants in auctions and guarantee issuance of bonds as stipulated in Clauses 1 and 2 of this Article may be considered and recognized as members of the bond market makers system if they meet the required conditions.

4. The Ministry of Finance shall specify standards and conditions for organizations participating in auctions, guarantees, agency issuance of bonds, and members of the bond market makers system in accordance with the development of the market during each period.

Article 13. Issuance and Payment Fees for Bonds

1. All costs incurred during the issuance and payment of bonds shall be covered by the central budget.

2. The fee levels paid to organizations implementing auctions, guarantees, agency issuance, and payment of bonds shall be determined based on agreements between the issuer and service providers according to market principles and transparency. The Ministry of Finance shall provide guidance on the framework for fees paid to organizations implementing auctions, guarantees, agency issuance, and payment of bonds.

Article 14. Utilization of Issuance Proceeds from Bonds

All proceeds from the issuance of government bonds must be centralized in the central budget for use in accordance with the purpose of issuance, the State Budget Law, and related legal documents.

Article 15. Principal and Interest Repayment of Bonds

1. The central budget shall ensure the source for principal and interest repayment of bonds upon maturity.

2. The Ministry of Finance shall organize the repayment of principal and interest of bonds to bondholders upon maturity.

PART 2. GUARANTEED BONDS

Article 16. Conditions for Issuing Guaranteed Bonds

1. Enterprises issuing guaranteed bonds must satisfy the following conditions:

a) Issuing bonds to invest in programs and projects as stipulated at points a, b, and c, Clause 2, Article 4 of this Decree;

b) Programs and projects have completed investment procedures in accordance with laws on investment and related laws;

c) Meeting the conditions prescribed in Clause 2, Article 34 of the Law on Public Debt Management;

d) Meeting the conditions prescribed by laws on issuing corporate bonds;

đ) Having a bond issuance plan that has been appraised by the Ministry of Finance and approved by the Prime Minister for government guarantee;

e) Complying with other provisions of laws on granting and managing government guarantees.

2. State policy banks, financial and credit organizations issuing guaranteed bonds must satisfy the following conditions:

a) Issuing bonds to implement state-targeted credit programs as decided in the approval of government guarantee;

b) Having a bond issuance plan that has been appraised by the Ministry of Finance and approved by the Prime Minister for government guarantee;

c) Complying with other provisions of laws on granting and managing government guarantees.

Article 17. Bond Issuance Plan

1. The bond issuance plan prescribed in point đ, Clause 1, Article 16 of this Decree must include the following basic contents:

a) General information about the business sector and financial status of the issuer;

b) Content and financial plan of the program or project using funds from bond issuance;

c) Estimated volume, term, interest rate, and method of bond issuance;

d) Estimated bond issuance plan and implementation and disbursement plan of the program or project;

đ) Plan for using and managing the source of funds from bond issuance;

e) Plan for arranging funds to pay off principal and interest of bonds when due;

g) Commitments of the issuer to bond purchasers.

2. The bond issuance plan prescribed in point b, Clause 2, Article 16 of this Decree must include the following basic contents:

a) State-targeted credit programs as decided by the Government and the Prime Minister;

b) Plan for mobilizing sources of funds to implement state-targeted credit programs, including funds from bond issuance;

c) Estimated volume, term, interest rate, and method of bond issuance;

đ) Estimated bond issuance plan and implementation and disbursement plan of the program;

đ) Plan for using and managing the source of funds from bond issuance;

e) Plan for arranging funds to pay off principal and interest of bonds when due;

g) Commitments of the issuer to bond purchasers.

3. The bond issuance plan must be approved in writing by the Board of Directors, Board of Members, or Management Board of the enterprise, financial and credit organization, or state policy bank according to the charter and operation regulations of the issuer.

Article 18. Appraisal and Granting of Government Guarantee

1. The issuer sends the Ministry of Finance a request file for government guarantee appraisal. The request file includes the bond issuance plan prescribed in Article 17 of this Decree; legal documents proving compliance with bond issuance conditions as stipulated in Article 16 of this Decree; and other relevant documents according to laws on granting and managing government guarantees.

2. Based on the request file, provisions of this Decree, laws on granting and managing government guarantees, and current related laws, the Ministry of Finance appraises the bond issuance plan and submits it to the Prime Minister for approval of the decision to grant government guarantee.

For cases of restructuring debts of programs and projects funded by guaranteed bonds, the bond issuance plan for debt restructuring must be approved in writing by the Prime Minister and agree to the decision to grant government guarantee.

For state-targeted credit programs, the Ministry of Finance appraises the bond issuance plan during the planning process of the program's funding sources to submit to the Prime Minister for approval of the scope, target groups, and total funding sources of the state-targeted credit program, including the limit of funds raised through guaranteed bond issuance.

3. After the Prime Minister agrees to the decision to grant government guarantee, the Ministry of Finance notifies the issuer in writing to organize the bond issuance according to the approved plan and the provisions of this Decree. The bond issuance must be based on the implementation progress and disbursement of the program or project. The Ministry of Finance specifies the bond issuance phases based on the issuer's proposal, project disbursement progress, and market conditions.

4. At the end of the bond issuance phase, the issuer must report to the Ministry of Finance on the issuance results to complete the actual guarantee obligation confirmation procedure according to laws on granting and managing government guarantees.

5. The Ministry of Finance provides detailed guidance on the procedures and formalities for appraising and granting government guarantee for guaranteed bond issuance.

Article 19. Methods of Issuing Bonds

1. For enterprises issuing bonds as provided for in Clause 1, Article 16 of this Decree, the method of issuing bonds shall be carried out in accordance with the laws on issuing corporate bonds.

2. For state policy banks issuing bonds as provided for in Clause 2, Article 16 of this Decree, the methods of issuing bonds include:

a) Auction issuance of corporate bonds;

b) Agents issuing bonds.

3. The Ministry of Finance shall provide detailed guidance on the methods of issuing government-guaranteed bonds as stipulated in this Decree and the Securities Law.

Article 20. Fees for Issuing and Paying Bonds

1. Costs arising during the process of issuing, paying principal and interest on issuance, and government guarantee fees shall be borne by the issuer and included in the value of the project using the bond issuance funds or the issuer's operating costs, depending on the purpose of use.

2. The Ministry of Finance shall guide the framework for fees paid to organizations implementing tendering, guaranteeing, issuing agency, and bond payment services.

Article 21. Use of Bond Issuance Funds

1. All proceeds from bond issuance must be used strictly according to the approved bond issuance plan as stipulated in Articles 17 and 18 of this Decree, which has been approved by the Prime Minister.

2. The issuer shall bear full responsibility for managing and using the bond issuance funds for their intended purposes effectively, ensuring compliance with current laws on government guarantee issuance and management.

Article 22. Payment Guarantee

The maximum payment guarantee is one hundred percent (100%) of the principal and interest value of the issued bonds as stipulated in the approved bond issuance plan as stipulated in Articles 17 and 18 of this Decree.

Article 23. Bond Repayment

1. The issuer is responsible for repaying the principal and interest of the bonds when due, using its own legitimate sources of funds.

2. In cases where the issuer cannot fulfill or fully fulfill the obligation to repay the principal and interest when due, the Ministry of Finance shall perform the issuer's repayment obligation within the scope of the government guarantee already granted. The issuer shall have the responsibility to report, recognize the debt, and repay the Ministry of Finance according to the current laws on government bond issuance and management.

SECTION 3. LOCAL GOVERNMENT BONDS

Article 24. Conditions for Issuing Bonds

1. Issuing bonds for investment in economic and social development projects under the local budget's responsibilities as stipulated in the State Budget Law and included in the five-year investment plan decided by the Provincial People's Council; or projects determined by the Provincial People's Council to have the ability to recover costs. These projects must complete investment procedures in accordance with the laws on investment and other relevant current laws.

2. Having a bond issuance plan that has been approved by the Provincial People's Council and reviewed and accepted in writing by the Ministry of Finance.

3. The total amount of funds raised through bond issuance must not exceed the annual borrowing limit from the provincial budget as stipulated in the State Budget Law and related guiding documents.

For projects determined to have the ability to recover costs, the total loan value, including bond issuance, invested in a single project shall not exceed eighty percent (80%) of the total investment cost of that project.

Article 25. Bond Issuance Plan

1. The bond issuance plan prescribed in Clause 2, Article 24 of this Decree must include the following basic contents:

a) Purpose of bond issuance and information about the project using the proceeds from bond issuance;

b) Project investment capital structure and the need for capital from bond issuance;

c) Estimated volume, term, interest rate, method, and issuance plan of bonds;

d) Scheme for arranging sources to repay principal and interest on bonds upon maturity;

đ) Commitments of the issuer towards bond purchasers.

2. The bond issuance plan must be approved in writing by the Provincial People's Council.

Article 26. Review of the Bond Issuance Plan

1. The provincial People's Committee sends the bond issuance dossier to the Ministry of Finance for review. The bond issuance dossier includes the bond issuance plan as stipulated in Article 25 of this Decree, legal documents proving compliance with the conditions for bond issuance as prescribed in Article 24 of this Decree, and other related documents.

2. Based on the bond issuance dossier, the provisions of this Decree, the Law on Public Debt Management, the State Budget Law, and other relevant current laws, the Ministry of Finance reviews the bond issuance plan and issues a document approving or not approving the bond issuance.

Article 27. Methods of Bond Issuance

1. Bonds shall be issued through auction, guarantee, or agency methods.

2. Participants in auctions, guarantees, or agencies for bond issuance shall be carried out according to the provisions of Clause 2, Article 12 of this Decree.

Article 28. Fees for Bond Issuance and Repayment

1. All expenses incurred during the bond issuance process and repayment of principal and interest on bonds shall be borne by the local budget.

2. The Ministry of Finance shall guide the framework for fees paid to organizations implementing tendering, guaranteeing, issuing agency, and bond payment services.

Article 29. Use of Proceeds from Bond Issuance

All funds raised from bond issuance must be used in accordance with the approved bond issuance plan and in compliance with the provisions of the State Budget Law and the Law on Public Debt Management.

Article 30. Repayment of Principal and Interest on Bonds

1. The provincial People's Committee is responsible for organizing and implementing full repayment of principal and interest on bonds upon maturity.

2. Sources for repayment of principal and interest on bonds are guaranteed from the provincial budget and revenues from investment projects with repayment capacity in the locality.

Chapter III

ISSUANCE OF BONDS TO THE INTERNATIONAL MARKET

SECTION 1. GOVERNMENT BONDS

Article 31. Conditions for Bond Issuance

1. Meeting the conditions prescribed in Clause 2, Article 21 of the Law on Public Debt Management.

2. Having a bond issuance plan approved by the Government.

3. Meeting the conditions prescribed in Clause 1, Article 28 of the Law on Public Debt Management when issuing bonds to restructure the debt portfolio.

4. The value of government bonds issued to the international market must be within the annual total limit for foreign commercial borrowing by the Government and consistent with the public debt management strategy and medium-term debt management program approved by the Prime Minister.

Article 32. Bond Issuance Plan

1. The Ministry of Finance shall take the lead in drafting the bond issuance plan to be submitted to the Government for approval for each issuance round.

2. The issuance plan includes the following basic contents:

a) Purpose of issuance and use of issuance proceeds;

b) Legal bases for bond issuance, including decisions approving investment projects by competent authorities and other legal bases as prescribed by current laws;

c) Estimated volume, structure, currency of issuance, term of bonds, market, time, and method of bond issuance;

d) Market conditions and estimated bond interest rates;

đ) Estimated method of selecting organizations or consortia for issuance guarantees, domestic legal advisors, international legal advisors, related agencies, and plans for organizing bond issuance;

e) Estimated costs related to bond issuance;

g) Scheme for using issuance proceeds, handling risks, and repayment plan for principal and interest on bonds;

h) Evaluation and analysis of potential risks and difficulties that may arise during the bond issuance process and proposals for remedial measures.

Article 33. Approval of Bond Issuance Program

1. The Government shall approve the bond issuance program for the issuance of government bonds into the international market with the following main contents:

a) Purpose of issuance and use of issuance proceeds;

b) Type of currency, volume, term, and method of bond issuance;

c) Expected issuance time;

d) Market selected as the place for bond issuance;

đ) Responsibilities of relevant agencies.

2. The form of approval is a Resolution of the Government.

Article 34. Documents for Bond Issuance

1. The documents for bond issuance are legal documents prepared by the Ministry of Finance in coordination with domestic legal advisors, international legal advisors, and related agencies according to Vietnamese laws and applicable laws at the bond issuance market.

2. The documents for bond issuance include the following basic documents:

a) Prospectus;

b) Guarantee contracts for issuance;

c) Legal advisory contracts;

d) Bond purchase and sale contracts;

đ) Agency agreements;

e) Legal opinions;

g) Other related documents.

Article 35. Procedure for Bond Issuance

1. The Ministry of Finance shall take the lead and coordinate with ministries, sectors, and related organizations to organize the issuance of bonds in accordance with the approved bond issuance program by the Government.

2. Based on actual conditions and relevant legal provisions, the Ministry of Finance shall decide on the issuance procedure in accordance with the following main steps:

a) Selection of guarantors or guarantor groups: select one or more leading international financial and credit investment organizations worldwide, experienced in the bond issuance field, to guarantee the issuance based on competitive bidding criteria and lists of organizations selected by reputable international magazines;

b) Selection of legal advisors: take the lead and coordinate with the guarantor or guarantor group to select reputable and experienced organizations and law firms both domestically and internationally to serve as domestic and international legal advisors for the Ministry of Finance and the guarantor or guarantor group;

c) Completing issuance documents: take the lead and coordinate with domestic or international legal advisors to negotiate and sign contracts with the guarantor or guarantor group, related agents, and prepare issuance documents consistent with international practices and Vietnamese laws;

d) Credit rating assessment: take the lead and coordinate with related agencies to work with credit rating organizations to confirm the credit rating for the country;

đ) Promotional organization: the promotional organization for bond offerings is carried out by the Ministry of Finance depending on the requirements of each issuance method. The Ministry of Finance coordinates with the guarantor or guarantor group to organize bond promotions at major global financial centers to meet with the international investor community before pricing and issuing bonds;

e) Issuance organization: the Ministry of Finance decides on the terms and conditions of bond issuance during the bond pricing process based on advice from the guarantor or guarantor group, consistent with market conditions and principles outlined in the approved bond issuance program by the Government;

g) Capital receipt: the Ministry of Finance organizes the receipt of funds from issued bonds in accordance with signed agreements;

h) Completion of issuance transaction: after receiving payment for bond sales, the Ministry of Finance completes and signs legal documents to conclude the transaction in accordance with international practices, and reports the issuance results in accordance with current regulations.

Article 36. Utilization of Issuance Proceeds from Government Bonds

1. The entire amount of proceeds from the issuance of government bonds on the international market shall be allocated, managed, and utilized strictly in accordance with the purposes specified in the issuance project approved by the Government in accordance with Articles 32 and 33 of this Decree, the State Budget Law, the Public Debt Management Law, and other relevant legal documents.

2. In cases where bonds are issued for re-lending purposes, the utilization of funds must comply with the current legal provisions on re-lending mechanisms and the guidelines of the Ministry of Finance regarding the use and supervision of the use of funds from the issuance of government bonds.

Article 37. Issuance and Payment Fees for Bonds

1. The expenses incurred during the issuance process, principal repayment, and interest payment on bonds include:

a) One-time expenses: issuance advisory fees; domestic and international legal advisory fees; fees paid to credit rating organizations; fees paid to listing agents, printing services; domestic and foreign costs related to the preparation for issuance and promotion of bond issuance; and other actual expenses (if any);

b) Annual fees payable to financial agents and payment agents, transfer agents, and securities exchanges where the bonds are listed according to the signed agency agreements;

c) Other expenses related to the issuance, principal repayment, and interest payment on bonds (if any).

2. For cases where government bonds are issued for the purpose of restructuring the government's debt portfolio, the expenses incurred during the issuance process, principal repayment, and interest payment on bonds shall be covered by the central budget.

3. For re-lending cases:

a) All expenses incurred during the issuance process, principal repayment, and interest payment on bonds shall be borne and allocated to each borrower based on the proportion of the re-lending capital;

b) The state budget shall temporarily advance the expenses incurred during the issuance process of bonds and be reimbursed directly by deducting from the allocated bond proceeds before transferring them to the borrower;

c) The state budget shall temporarily advance to pay annual expenses and allocate them based on the proportion of the re-lending capital for each borrower. The borrower shall repay these advances to the state budget according to notifications from the Ministry of Finance.

Article 38. Principal and Interest Repayment of Bonds

1. The Ministry of Finance shall directly transfer state funds into the account of the agent to repay the principal and interest to the bondholders when due.

2. In cases of re-lending: upon maturity of the principal and interest payments on bonds, the borrower shall make direct payments into the account of the payment agent or transfer payments into the Foreign Debt Repayment Reserve Fund according to specific provisions in the re-lending contracts for the Ministry of Finance to transfer funds to the payment agent to fulfill payments to the bondholders.

Article 39. Information Updates

The Ministry of Finance is responsible for monitoring transactions of bonds on the market and coordinating with relevant units to provide updated information about Vietnam's economic situation to foreign investors in accordance with international practices after issuance.

PART 2. GUARANTEED BONDS

Article 40. Conditions for Issuing Bonds

1. Meeting the conditions stipulated in Clause 1, Article 16 of this Decree.

2. Having a bond issuance plan for international markets that has been appraised by the Ministry of Finance and approved by the Prime Minister.

3. The issuance value and term of the bonds must comply with the conditions set forth in Clause 3, Article 34 of the Public Debt Management Law, within the annual limit of commercial borrowing and government-guaranteed foreign borrowing approved by the Prime Minister.

4. Submitting audited financial statements for the three (03) consecutive years immediately preceding the year of bond issuance, which have been audited by the State Audit Agency or an independent auditing organization legally operating in Vietnam. These statements must show no losses in the three (03) most recent consecutive years, no accumulated losses, and no overdue debts. The audit report of the issuing entity must be a clean opinion audit report. In cases where the audit report contains a disclaimer, it must be a non-material disclaimer, and the issuing entity must provide a detailed explanation of the reasons for the disclaimer, its impact on the assets, capital sources, business operations, and corrective measures of the issuing entity.

5. Adhering to current laws governing the issuance of bonds on international markets regarding the granting and management of government guarantees.

Article 41. Bond Issuance Plan

1. The bond issuance plan developed by the issuing entity must include basic contents as prescribed in Clause 1, Article 17 of this Decree, and the following contents:

a) Anticipated currency type and market for bond issuance;

b) Anticipated method for selecting organizations or combined guarantors for bond issuance, domestic legal advisors, international legal advisors, and related agents;

c) Risk management plan, including exchange rate risk.

2. The bond issuance plan must be approved by the owner's representative, Board of Directors, or Board of Members according to the enterprise's charter and operational regulations.

Article 42. Appraisal and Granting of Government Guarantees

1. The issuing entity submits to the Ministry of Finance a bond issuance application for appraisal. The bond issuance application includes:

a) The bond issuance plan as stipulated in Article 41 of this Decree;

b) Legal documents proving compliance with the conditions for bond issuance as stipulated in Article 40 of this Decree;

c) Confirmation from credit rating organizations regarding the credit rating of the issuing entity;

d) Other relevant documents as prescribed by current laws on the granting and management of government guarantees.

2. Upon receiving the complete bond issuance application from the issuing entity, the Ministry of Finance leads the appraisal of the bond issuance plan according to the provisions of this Decree and current laws on the granting and management of government guarantees.

3. After soliciting opinions from relevant agencies, the Ministry of Finance compiles and reports to the Prime Minister for approval of the bond issuance plan appraisal report and recommendations on the possibility of issuing government-guaranteed bonds on international markets for the Prime Minister's consideration and decision.

4. After the Prime Minister approves the bond issuance plan and agrees to grant the government guarantee, the Ministry of Finance notifies the issuing entity in writing to organize the issuance of bonds according to the approved plan and the provisions of this Decree.

5. The granting and management of government guarantees for corporate bonds are carried out by the Ministry of Finance in accordance with current laws on the granting and management of government guarantees for issuing bonds on international markets.

Article 43. Fees for Issuing and Repaying Bonds

The costs arising during the process of issuing bonds, repaying principal and interest on bonds, and government guarantee fees shall be implemented in accordance with Clause 1 of Article 20 of this Decree.

Article 44. Utilization of Issuance Proceeds

1. All funds received from bond issuance must be used strictly in accordance with the approved bond issuance project pursuant to Articles 41 and 42 of this Decree.

2. The issuer subject shall bear full responsibility for managing and using the issuance proceeds for their intended purpose and effectively; ensuring compliance with current laws governing the granting and management of government guarantees, foreign exchange management, and external borrowing and repayment.

Article 45. Repayment of Principal and Interest on Bonds

1. The issuer subject shall directly transfer funds to the payment agent according to the signed agreement to repay principal and interest on bonds to the bondholders upon maturity.

2. In cases where the issuer subject is unable to fulfill or fully fulfill its obligation to repay principal and interest on bonds upon maturity, the Ministry of Finance shall perform the issuer's repayment obligations within the scope of the government guarantee issued. The issuer subject shall be responsible for reporting, acknowledging debt, and repaying the Ministry of Finance in accordance with current laws regarding the granting and management of government guarantees.

Chapter IV

DUTIES AND LIMITS OF STATE MANAGEMENT

Article 46. Ministry of Finance

1. Lead and coordinate with relevant agencies to guide the issuance, utilization, and repayment of government bonds, government-guaranteed bonds, and local government bonds as stipulated in this Decree.

2. Lead in formulating and implementing plans for domestic issuance of government bonds to raise funds for the state budget; establish the ceiling for guarantees for government-guaranteed bonds.

3. Specify the framework for interest rates on government bonds, government-guaranteed bonds, and local government bonds.

4. Serve as the focal point for receiving, compiling, monitoring, and implementing information and reporting systems on the situation of government bond issuance, government-guaranteed bonds, and local government bonds.

5. Lead in reviewing the issuance projects of government-guaranteed bonds and local government bonds to ensure that these projects are developed and approved in accordance with the content, procedures, formalities, and authority prescribed in this Decree.

6. Lead in developing the issuance project of government bonds in international markets for approval by the Prime Minister, organizing the issuance and relending of the issuance proceeds, including:

a) Completing legal documentation for the issuance;

b) Leading and coordinating with relevant agencies to work with national credit rating organizations;

c) Signing contracts with foreign partners related to the issuance of government bonds in international capital markets based on the approved issuance project;

d) Serving as the focal point for providing information to foreign partners according to agreements signed when issuing international bonds;

e) Selecting relending agencies and implementing relending of international bond proceeds in accordance with laws on relending of foreign loans by the government.

Article 47. The State Bank of Vietnam

1. Guide, organize registration and confirm foreign commercial loan limits for bond issuance tranches guaranteed by the Government to be issued on the international market.

2. Repurchase foreign currency obtained from issuing government bonds denominated in foreign currency and sell foreign currency to the Ministry of Finance to pay off principal and interest on foreign currency-denominated bonds when due.

3. Coordinate with the Ministry of Finance to organize auctions for treasury bill issuance through the State Bank of Vietnam Trading Center.

4. Coordinate with the Ministry of Finance in completing relevant documents and procedures related to issuing government bonds on the international market.

5. Provide necessary data and documents related to the management field upon request of the Ministry of Finance and coordinate work with credit rating organizations.

Article 48. The Ministry of Planning and Investment

1. Coordinate with the Ministry of Finance to develop plans for issuing government bonds and the Government's guarantee limit for bond issuance.

2. Coordinate with the Ministry of Finance in completing relevant documents and procedures related to issuing government bonds on the international market.

3. Provide necessary data and documents related to the management field upon request of the Ministry of Finance and coordinate work with credit rating organizations.

Article 49. The Ministry of Justice

1. Fulfill the role of domestic legal advisory for the Government regarding tranches of government bond issuance on the international market.

2. Participate in opinions on legal issues in guarantee issuance contracts, other legal contracts related to government bond issuance, corporate bonds guaranteed by the Government to be issued on the international market, and agreements on Government guarantees before submitting to the Prime Minister for decision.

3. Review differences between agreements on issuing government bonds, corporate bonds guaranteed by the Government to be issued on the international market, and domestic laws, and monitor the handling of these issues during the implementation of such agreements.

4. Provide legal opinions on agreements on issuing government bonds, corporate bonds guaranteed by the Government to be issued on the international market, and provide legal opinions on the legal status of the issuer organization and the guarantor agency at their request.

Article 50. Provincial People's Committees

1. Develop proposals for local government bond issuance, repayment plans, submit them to the Provincial People's Council for approval, and send them to the Ministry of Finance for review.

2. Organize local government bond issuance according to the proposal approved by the Ministry of Finance.

3. Monitor the use of funds and recovery of loans from local government bond issuance.

4. Balance the provincial budget to ensure payment sources for bonds when due.

5. Implement information and reporting systems as guided by the Ministry of Finance.

Article 51. Enterprises borrowing funds from government bond issuance

1. Adhere to legal regulations on relending foreign loans of the Government.

2. Provide complete project documentation about investment projects expected to use funds from international government bond issuance to the Ministry of Finance to build issuance proposals.

3. Fully bear legal responsibility for using funds from international government bond issuance according to the approved objectives by the Government. Any misuse or failure to fulfill committed obligations will be handled according to the law.

4. Commit and have the responsibility to timely and fully fulfill payment obligations to the Ministry of Finance according to the relending contract agreements.

5. Organize accounting records, store appropriate documentation and vouchers regarding fund withdrawal and relending usage, and periodically (quarterly, annually) prepare reports to submit to the Ministry of Finance.

6. Periodically or urgently, as required by the Ministry of Finance, enterprises must submit evaluation reports and provide explanatory documents related to the effectiveness of relending usage from government bond issuance funds; implement mandatory annual financial statement audits on fund usage and report to the Ministry of Finance.

Article 52. Subjects Issuing Government-Guaranteed Bonds

1. Shall be responsible for performing obligations and responsibilities as prescribed in this Decree, regulations on granting and managing government guarantees, and related legal documents.

2. Shall conduct mandatory auditing of annual financial reports and implement information and reporting systems as stipulated by the Ministry of Finance.

Article 53. Relevant Ministries and Sectors

1. Shall supervise the management and utilization of government bond capital invested in programs and projects under their jurisdiction.

2. Shall coordinate with the Ministry of Finance and relevant agencies in guiding, inspecting, supervising, and implementing the provisions of this Decree.

3. Shall coordinate with the Ministry of Finance to provide periodic or ad hoc data for national credit rating assessment, enterprise credit ratings, and work with credit rating agencies.

4. Shall coordinate with the Ministry of Finance and the Ministry of Justice to provide necessary data and information for preparing the Prospectus, drafting legal opinions, and participating in data verification sessions together with the syndicate of guarantee banks and related units for the issuance of government bonds to the international market.

Article 54. Information Reporting System

1. Subjects issuing government-guaranteed bonds and local government bonds shall report the situation of bond issuance, capital usage, and debt repayment to the Ministry of Finance.

2. Subjects issuing bonds shall implement reporting systems as specifically guided by the Ministry of Finance.

Article 55. Handling Violations

Organizations and individuals violating the provisions of this Decree, depending on the nature and extent of the violation, shall be subject to administrative penalties, disciplinary actions, and if material damage is caused, they must compensate according to the law. In cases of serious violations, criminal responsibility may be pursued.

Chapter V

IMPLEMENTING PROVISIONS

Article 56. Effective Date

1. This Decree takes effect from February 20, 2011.

2. This Decree replaces Decree No. 141/2003/NĐ-CP dated November 20, 2003 on the issuance of government bonds, government-guaranteed bonds, and local government bonds, and the provisions on the issuance of government bonds to the international market as stipulated in Decree No. 53/2009/NĐ-CP dated June 4, 2009 on the issuance of international bonds.

Article 57. Organization and Implementation

1. The Ministry of Finance shall provide guidance on the implementation of this Decree.

2. Ministers, Heads of ministerial-level agencies, Heads of government-affiliated agencies, Chairpersons of provincial and centrally governed city People's Committees are responsible for implementing this Decree./.