Decision No. 09/2005/QD-BTC on the issuance of the third tranche of Government bonds in 2005 for investment in important transportation and irrigation works of the country.

Pursuant to …;

Regarding the issuance of the third tranche of Government bonds in 2005 for investment in certain important transportation and irrigation works

of the country 

THE MINISTER OF FINANCE

Pursuant to Decree No. 77/2003/NĐ-CP dated July 1, 2003 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

Pursuant to Decree No. 141/2003/ND-CP dated November 20, 2003 of the Government on the issuance of Government bonds, Government-guaranteed bonds, and local government bonds;

Pursuant to Decision No. 235/2003/QD-TTg dated November 13, 2003 of the Prime Minister stipulating the functions, tasks, powers, and organizational structure of the State Treasury under the Ministry of Finance;

Pursuant to Decision No. 182/2003/QD-TTg dated September 5, 2003 of the Prime Minister on the issuance of Government bonds for investment in certain important transportation and irrigation projects of the country;

At the proposal of the Director General of the State Treasury,

Pursuant to …;

Article 1. Issuance of the third tranche of Government bonds in 2005 for investment in constructing certain important transportation and irrigation works of the country with a total amount of 10,000 billion Vietnamese dong and 30 million US dollars (USD).

Article 2. Government bonds (hereinafter referred to as bonds) shall be issued and paid in Vietnamese dong and US dollars, in the form of certificates or book-entry.

Certificates of bonds in Vietnamese dong include those with and without registered names; printed in denominations of 100,000 dong, 200,000 dong, 500,000 dong, 1,000,000 dong, 2,000,000 dong, 5,000,000 dong, 10,000,000 dong, 20,000,000 dong, 50,000,000 dong, and 100,000,000 dong.

Foreign currency bonds shall be issued in the form of book-entry.

Article 3. Method of issuing bonds:

3.1- Direct issuance through the State Treasury system:

Bonds in Vietnamese dong shall be issued at State Treasury units throughout the country.

a- The subjects eligible to purchase bonds include organizations and citizens of Vietnam; overseas Vietnamese; foreigners working and residing in Vietnam; foreign organizations operating on Vietnamese territory; except for subjects who are guarantors and bidders for bonds (including bidding for bonds in Vietnamese dong through securities trading centers).

Vietnamese organizations may not use state budget funds to purchase bonds.

b- Term of bonds: 5 years.

c- Interest rate on bonds: To be determined by the Minister of Finance at the time of issuance.

d- Issuance period: From August 1, 2005 to before September 30, 2005.

3.2- Bidding for bonds in Vietnamese dong through the Ho Chi Minh City Securities Trading Center and the Hanoi Securities Trading Center (hereinafter collectively referred to as the Securities Trading Centers):

a- Subjects eligible to participate in bond bidding are market participants in bond bidding through the Securities Trading Centers. Organizations and individuals wishing to purchase bonds through bidding must register with market participants in bond bidding and organizations traded on the securities market.

b- Term of bonds: 5 years and 10 years.

c- Interest rate on bonds: Formed based on the results of the bidding process.

d- Issuance period: From February 10, 2005 to before December 15, 2005.

3.3- Bidding for bonds in US dollars through the State Bank of Vietnam Trading Department:

a- Subjects eligible to participate in bond bidding are credit institutions in Vietnam that are permitted to engage in foreign exchange transactions and have foreign currency accounts with the State Bank of Vietnam.

b- Term of bonds: 5 years and 10 years.

c- Interest rate on bonds: Formed based on the results of the bidding process.

d- Issuance period: From February 10, 2005 to before December 15, 2005.

3.4- Guaranteeing the issuance of bonds in Vietnamese dong:

a- Subjects eligible to participate in guaranteeing the issuance of bonds are organizations permitted to guarantee bond issuance according to current regulations.

b- Term of bonds: 5 years and 10 years.

c- The interest rate on bonds and the fee for guaranteeing issuance shall be agreed upon between the guarantor organizations and the State Treasury in accordance with current regulations.

d- Issuance period: From February 10, 2005 to before December 15, 2005.

Article 4. Principles and methods of principal and interest payment for bonds:

4.1- Bonds shall be settled in the currency in which they were issued.

4.2- Bonds in Vietnamese dong:

- Bonds issued through the State Treasury (retail), non-registered name type, pre-printed denomination: Settlement at State Treasury units throughout the country.

- Bonds issued through the State Treasury (retail), registered name type, pre-printed denomination: Settlement at the State Treasury unit where the bonds were issued.

- Bonds bid through the Securities Trading Centers and guaranteed issuance, listed on the Securities Trading Centers: Settlement shall be carried out jointly by the Securities Trading Centers and the State Treasury.

4.3- Bonds in US dollars:

The State Bank of Vietnam Trading Department acts as an agent for the Ministry of Finance in the issuance and settlement of bonds.

4.4- Principal repayment of bonds: The principal of bonds shall be repaid once at maturity.

In case the owner of bonds (registered name type) is an individual and encounters special difficulties or force majeure, and has a need to repay the bonds early, such request shall be confirmed by the local authority where the individual resides or the responsible agency, and reviewed and resolved by the Director General of the State Treasury for early redemption. Bonds that have not reached the interest payment period will not be paid interest.

4.5- Interest payment on bonds: Interest on bonds shall be paid annually when 12 months have passed since the date of purchase.

Upon maturity of principal or interest payment, if the bond owner has not come to settle, the principal or interest amount shall be reserved for repayment when the owner requests settlement; no compound interest shall be calculated during the overdue period.

Article 5. The bond owner has the right and is entitled to the following benefits:

5.1- Transfer, gift, inheritance, or pledge in credit relationships.

5.2- Buy and sell bonds through the Securities Trading Centers for bonds listed on the Securities Trading Centers.

5.3- Bond owners who are credit institutions may trade bonds in the money market; discount and rediscount bonds in accordance with the regulations of the State Bank of Vietnam.

5.4- Individual bond owners are exempt from personal income tax on interest income from bonds and capital gains from bond transactions; if necessary, they can deposit their bonds at State Treasury units for safekeeping free of charge.

Article 6. The Director General of the State Treasury is responsible for:

6.1- Organizing the issuance and settlement of bonds in accordance with Articles 3 and 4 of this Decision.

6.2- Proactively managing the volume, term, and interest rate of bond issuance under the bidding and guarantee methods stipulated in Points 3.2, 3.3, and 3.4 of Article 3 of this Decision within the approved volume, term, and interest rate range by the Minister of Finance and in line with the capital usage needs.

6.3- Implement accounting records, reporting, and settlement of bond revenue and bond payments in accordance with prescribed regulations.

Article 7. This Decision shall take effect fifteen days from the date of publication in the Official Gazette.

The Director of the State Treasury shall provide detailed guidance and direct implementation throughout the State Treasury system, heads of relevant units under the Ministry of Finance, Directors of Provincial Departments of Finance and State Treasuries of centrally governed cities and provinces shall be responsible for enforcing this Decision./.