Circular No. 32/2004/TT-BTC guides the issuance of government bonds through the State Treasury system.

CIRCULAR

Guidelines for the issuance of government bonds

through the State Treasury system

Pursuant to Decree No. 141/2003/NĐ-CP dated November 20, 2003 of the Government on the issuance of government bonds, government-guaranteed bonds, and local government bonds, the Ministry of Finance provides guidelines for the issuance of government bonds through the State Treasury system as follows:

This technical regulation sets out technical requirements, testing methods, sampling procedures; management requirements; responsibilities of organizations and individuals producing, trading, and importing cigarettes.

1. Government bonds issued through the State Treasury system shall have a term of one year or longer, including treasury bills, central government project bonds, and foreign currency bonds (collectively referred to as bonds).

2. The State Treasury system directly implements the sale of bonds to organizations and individuals purchasing bonds; organizes the payment of principal and interest on bonds; and stores and preserves bonds when the bondholders request.

3. Based on the annual capital-raising plan, the need for state budget funds, and the progress of projects and works, the Minister of Finance decides on the specific contents of each issuance of bonds through the State Treasury system.

4. Bonds issued through the State Treasury may be transferred (sold, given, gifted, inherited), or pledged in credit relationships.

Domestic currency bonds Male are sold at a price higher or lower than their face value during each issuance period with the same issue date and maturity date, and are listed and traded at the Securities Trading Center (Stock Exchange).

II. SPECIFIC PROVISIONS

1. Currency of issuance and payment

Bonds issued through the State Treasury system are issued and paid in Vietnamese dong Male and freely convertible foreign currencies.

Bonds issued in which currency shall be repaid in principal and interest in that currency.

The Minister of Finance decides on the type of foreign currency and the territory for issuing foreign currency bonds for each issuance period.

2. Form and denomination of bonds

2.1. Bonds issued through the State Treasury system are in the form of certificates or book entries, either registered or unregistered.

2.1. Domestic currency bonds Male have a minimum denomination of VND 100,000 (one hundred thousand dong). Other denominations are multiples of VND 100,000.

The denomination of foreign currency bonds is determined by the Ministry of Finance for each issuance period.

2.3. Bond certificates are specified by the Ministry of Finance and printed by the State Treasury to distribute to organizations and individuals purchasing bonds.

3. Interest rate on bonds and method of interest payment

3.1. The interest rate on bonds is decided by the Minister of Finance for each issuance period, consistent with the general market interest rate and ensuring the benefits of organizations and individuals purchasing bonds.

3.2. Bonds issued have a fixed interest rate, and interest is paid according to the following methods:

a) Periodic interest payments;

b) One-time payment of interest together with principal upon maturity;

c) Immediate payment of interest at issuance.

4. Purchasers of bonds

The purchasers of bonds issued through the State Treasury system include:

4.1. Vietnamese citizens Male both within and outside the country;

4.2. Vietnamese citizens residing  abroad;

4.3. Foreign nationals working and residing in Vietnam; Male;

4.4. Public institutions;

4.5. Political organizations; political-social organizations; political-social-professional organizations; social organizations; social-professional organizations;

4.6. Enterprises and economic organizations of all economic sectors;

4.7. Foreign organizations operating legally in Vietnam Male.

Organizations that are beneficiaries of the state budget may not use state budget funds to purchase bonds.

The Minister of Finance specifies the purchasers of bonds for each issuance period.

5. Methods of selling bonds

5.1. Par value sales method

Applied in cases where bonds are continuously issued throughout the year or over extended periods without a predetermined end date.

Under this method, the amount paid by the purchaser to the State Treasury equals the face value of the bond. The issue date of the bond is considered the date the State Treasury receives payment from the purchaser or a notice of deposit from the bank (in the case of transfer purchases).

5.2. Sales above or below par value

Applied in cases where bonds are issued in batches, with each issuance period not exceeding two months, with predetermined start and end dates.

Bonds issued in a single batch have the same issue date and maturity date.

Method for determining the selling price of bonds:

a) Selling bonds above par value

Applied when the actual sale date occurs after the issue date. The formula for calculating the selling price of bonds is as follows:

            Where:

                        G:         Selling price of bonds

                        MG:     Face value of bonds

                        Ls:        Interest rate on bonds (% per annum)

                        d          Number of days from the issue date to the actual sale date.

            b) Selling bonds below par value

Applied when the actual sale date occurs before the issue date. The formula for calculating the selling price of bonds is as follows:

            Where:

                        G:         Selling price of bonds

                        MG:     Face value of bonds

                        Ls:        Interest rate on bonds (% per annum)

                        d          Number of days from the actual sale date to the issue date.

If the sale date coincides with the issue date, the purchaser must pay the State Treasury the face value of the bond.

The Ministry of Finance specifies the method for determining the selling price of bonds for each issuance period.

6. Payment for purchasing bonds

Organizations and individuals purchasing bonds can pay for the purchase in cash or by transfer.

7. Repayment of bonds upon maturity

7.1. Repayment of principal and interest on matured bonds

a) For domestic currency bonds Male

Unregistered bonds centrally deposited at the Securities Trading Center (Stock Exchange): The repayment of principal and interest on bonds is carried out by bond depository organizations. One day before the maturity date, based on the State Treasury's request, the Ministry of Finance transfers funds to the Securities Trading Center (Stock Exchange) to pay directly to the bondholders.

For bearer bonds not registered centrally at the Securities Trading Center (Securities Exchange), the bondholders may freely choose the Treasury units for principal and interest payments. The Treasury will advance funds to pay the bondholders. Monthly, the Treasury will aggregate the amounts paid to request the Ministry of Finance to refund the temporarily advanced amounts.

For named bonds, the principal and interest payments shall be made at the place of issuance. The Treasury will advance from its reserve fund to pay the bondholders. Monthly, the Treasury will aggregate the amounts paid to request the Ministry of Finance to refund the temporarily advanced amounts.

b) For foreign currency bonds:

The principal and interest payments of bonds due shall be made at the Treasury where the bonds were issued.

In cases where the amount of principal and interest payments of bonds includes foreign currency fractions (less than one unit of currency), such amounts will be converted into Vietnamese dong according to the selling exchange rate published by the Commercial Bank on the nearest date. Male The source of foreign currency for payments at Treasury units will be transferred by the Central Treasury. If the Ministry of Finance purchases foreign currency from the State Bank to pay the principal and interest of bonds due, it will be executed based on the average trading rate on the interbank foreign exchange market at the time of purchase.

The foreign currency source for payment at State Treasury units shall be transferred by the Central State Treasury. In the case where the Ministry of Finance purchases foreign currency from the State Bank to pay the principal and interest of maturing bonds, it shall be carried out at the average transaction rate on the inter-bank foreign exchange market at the time of purchase.

c) In cases where the bondholder has not come to make the interest or principal payment upon maturity, the interest or principal amount will be retained and refunded when the bondholder requests payment, without accruing compound interest or interest during the overdue period.

d) When making bond payments, the bondholder may receive cash or request that the entire amount of principal and interest due be transferred to their account. Transfer fees will be deducted from the amount the bondholder receives.

e) In cases where the bondholder is unable to come to make the bond payment upon maturity due to force majeure reasons, they may authorize another person to collect on their behalf. The person collecting the bond must bring their identification card and a power of attorney from the bondholder confirmed by the authority, unit, or People's Committee (commune, ward, town) where the bondholder is registered as a permanent resident.

7.2. Early redemption and repurchase of bonds

The early redemption of bonds and the interest rate to be received before maturity shall be carried out according to the regulations of the Ministry of Finance for each issuance period.

Depending on actual conditions, the Minister of Finance may decide to repurchase bonds early. The method and price of repurchasing bonds will be determined for each period and announced to the bondholders.

8. Handling cases of lost or damaged bonds

8.1. In cases where bearer bonds are lost or altered, erased, repaired, torn, or damaged to the point of losing their original shape and content, they will not be paid.

8.2. In cases where named bonds are lost or torn, damaged, the bondholder must report in writing to the Treasury where the bonds were issued. The head of the Treasury unit is responsible for checking, if the bond has not been misused to withdraw money, they will confirm to process payment upon maturity. If the bond has been misused, the head of the Treasury unit is responsible for timely inspection, determining the cause, and taking measures according to the law.

9. Management of revenue from bond issuance and sources for principal and interest payments

9.1. All proceeds from bond issuance will be centralized into the central budget and recorded according to the regulations of the Ministry of Finance for use in budgetary expenditures and projects designated by the Prime Minister.

For revenue from foreign currency bond issuance, after deducting direct foreign currency expenses, the Ministry of Finance will sell to the State Bank to increase the country's foreign exchange reserves based on the average trading rate on the interbank foreign exchange market at the time of sale.

9.2. The source of funds for principal and interest payments will be guaranteed by the central budget and balanced within the state budget or allocated from the issuance of government bonds in subsequent periods.

10. Transfer of Bonds

Bonds issued through the Treasury system can be used for transfer (purchase, sale, gift, inheritance).

10.1. Bearer bonds:

a) Bonds centrally registered at the Securities Trading Center (Securities Exchange) can be freely transferred according to securities and stock market regulations.

b) Unregistered bearer bonds can be freely transferred without having to go through procedures at the Treasury where the bonds were issued.

10.2. Named bonds: When transferring named bonds, procedures must be completed at the Treasury.

The General Director of the Treasury will provide specific guidance on the procedures related to the transfer of named bonds at Treasury units.

11. Confirmation of Bonds when Processing Collateral

11.1. For bearer bonds: The Treasury does not implement confirmation of bond ownership.

11.2. For named bonds: When a credit organization requests (in writing) confirmation of the legality and validity of the bond being pledged, the head of the Treasury will sign to confirm the owner's name and the amount paid for the bond after verifying and ensuring it matches the contents of the stored file.

12. Costs Related to Bonds

12.1. Costs of Issuing and Paying Bonds

All costs related to issuing and paying bonds will be covered by the central budget, including:

a) Costs for printing bond certificates under contracts with printing agencies.

b) Costs for issuing and paying bonds by the Treasury system at 0.5% of the bond value directly sold to buyers.

Specifically, for the issuance and payment of bonds to Social Insurance, the Treasury will charge a fee of 0.2% of the bond issuance value.

In the case of issuance in foreign currency, the issuance costs and payments shall be converted into Vietnamese dong according to the accounting exchange rate prescribed by the Ministry of Finance. Male According to the accounting exchange rate prescribed by the Ministry of Finance.

c) The payment costs for centralized depositary bonds at the Securities Trading Center (Securities Trading Corporation) shall be 0.1% of the actual principal and interest paid.

12.2. Bond storage and custody fees

The bond storage and custody fees at the State Treasury shall be implemented in accordance with the current regulations of the Ministry of Finance on the management of precious assets and valuable certificates held and stored by the State Treasury (currently Circular No. 80/1999/TT-BTC dated June 28, 1999 issued by the Ministry of Finance).

Depending on the actual situation, the Ministry of Finance may decide to waive the bond storage and custody fees at the State Treasury for specific types of bonds and specific bond purchasers.

12.3. Transfer fee for bond payments

The transfer fee for bond principal and interest into the account at the request of the bondholder shall be paid by the bondholder at the bank transaction fee rate.

III. IMPLEMENTATION

1. This Circular shall take effect fifteen days after its publication in the Official Gazette.

2. Ministers, Heads of ministerial-level agencies, Heads of government-affiliated agencies, Chairpersons of People's Committees of provinces and centrally governed cities shall be responsible for coordinating with the Ministry of Finance to implement this Circular.

The Director General of the State Treasury, Heads of relevant units under the Ministry of Finance shall be responsible for guiding and organizing the implementation of the provisions of this Circular./.