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$200mil minimum for every international bond issuance
Every series of international bond issuances by enterprises must have the equivalent value of $200mil at minimum, according to the draft decree on international bond issuance.
The draft decree, which is being compiled by the Ministry of Finance, is expected to be submitted to the government this year.
The issuance of government and corporate bonds in the international market is considered a kind of seeking of commercial loans. Therefore, the government and enterprises only issue bonds to mobilise capital for key national projects, get investment for projects with high efficiency, high solvency. Government bonds can also be issued in order to restructure the government’s debt portfolio.
A bond issuance is only carried out when the international market shows favourable conditions for the issuance to ensure the success of the issuance at reasonable cost.
Enterprises that issue international bonds must take responsibility for the use of the capital mobilised from the bond issuance.
The issuance must obey the current regulations on foreign debt management, foreign currency management, and international laws.
Regarding the value of bond issuances, the draft decree says that every series of international bond issuances by enterprises must have the equivalent value of $200mil at minimum. Moreover, the values must be within the national foreign commercial loan limit set every year. The issuance must have the approval of the Ministry of Finance in writing before it is carried out.
Beneficiaries of the international bond issuance which use the capital mobilised from the issuance must be national key projects or projects with high investment efficiency which have already fulfilled investment procedures in accordance with the laws.
The bond issuers must meet the requirements of the international market in terms of credit rating. They must have bond issuance plans approved by competent agencies.
If enterprises have an urgent demand for capital to implement state investment projects, but do not meet the conditions to issue bonds themselves, they can issue bonds in the international market with the guarantee of the government.
In order to have a bond issuance guaranteed by the government, enterprises have to meet a lot of strict requirements. One of the requirements is that the enterprises must have the credit rating equal or just one grade lower than the national credit rating.
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