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Sunday, September 25, 2022

New decree makes corporate bond market more transparent

By Van Phong

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HCMC – Decree 65/2022/ND-CP issued on September 16 by the Government is designed to boost transparency on the fast-growing corporate bond market.

The annual volume of bonds issued in the 2019-2021 period reached VND467 trillion, and accounted for 15% of the 2021 gross domestic product.

However, the Tan Hoang Minh Group case exposed the risk in the corporate bond market, as financially poor companies issued large quantities of bonds at a high coupon.

Decree 65 is intended to boost transparency in the corporate bond market and force debt issuing organizations to use the proceeds from bond sales for the officially stated purposes.

The decree tightens rules to make sure only capable and transparent companies can sell bonds, said Nguyen Tung Anh, FiinGroup’s senior credit risk researcher.

The decree requires professional individual investors to hold an investment portfolio totaling at least VND2 billion for 180 days or longer.

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