( 06/10/2023 - Công ty Luật TNHH SLF )
According to the corporate bond market report of KB Vietnam Securities, for real estate bonds alone, the maturity pressure in recent years has reached hundreds of trillions of dong. Corporate bonds are a common term when learning about the stock market. This is a quite popular investment channel because it has high interest rates, but it also has many risks. Below, SLF Law Firm will provide legal knowledge and clarify the content of “Forms of bond issuance” so that businesses and readers can clearly understand related legal issues.
Corporate bonds are issued by the following methods:
– Issuance bidding: is a method of selecting qualified investors to win bids to buy bonds that meet the requirements of the issuing enterprise.
– Underwriting: is a method of selling corporate bonds to investors who buy bonds through an underwriting organization or underwriting combination.
– Issuing agent: is the method by which the issuing enterprise authorizes another organization to sell bonds to investors who buy bonds.
– Sell directly to bond investors for issuing businesses that are credit institutions.
Bonds are securities with a term of 1 year or more issued by a business, confirming the owner’s legal rights and interests over a portion of the issuer’s debt. They are quite popular because they have an interest rate. high, but there are also many risks
The face value of the bonds offered to the public is 100,000 VND and multiples of 100,000 VND.
Convertible bond: is a type of bond issued by a joint stock company that can be converted into common shares of the issuing organization according to the terms and conditions determined in the bond issuance plan.
Secured bond: is a type of bond that is guaranteed to pay all or part of the interest and principal at maturity using the assets of the issuer or the assets of a third party in accordance with the law on transactions. guaranteed; or guaranteed payment according to the provisions of law.
Bonds with warrants are a type of bond issued by a joint stock company with warrants, allowing the warrant holder the right to buy a number of common shares of the issuing organization according to the terms and conditions agreed upon. determined in the bond issuance plan.
The concept of individual bonds, also known as privately issued corporate bonds, is a bond issued by a business to less than 100 investors, not including professional securities investors. Private bond offerings do not use mass media or the Internet.
Compare private corporate bond issuance and public bond issuance
Below are some comparisons of the basics between individual corporate bonds and public bond offerings.
Regarding the reason for issuance: Although the conditions for issuing bonds to the public in Vietnam are not too high, many businesses still cannot meet them, so they choose the path of private issuance, so many joint stock companies choose to issue bonds to the public. choose private placement because the amount of capital needed to be mobilized is small, the purpose of choosing private placement is to reduce costs; issued to the company’s employees; The company issues shares for the purpose of maintaining business relationships.
The distinction between private placement and public issuance is to determine that public issuers must be high quality companies with good business operations, in order to protect the investing public. . At the same time, this is also a condition for building a safe, public and effective stock market.
In principle, public issuance has many advantages over private issuance because businesses do not have to worry about liquidity, because bonds can be listed on the stock market so they can be sold to everyone. investors, raising capital is easier and cheaper. On the contrary, privately issued corporate bonds have actually filtered investors to participate in the current risky playing field because to participate in buying bonds, investors must have at least 100 million VND or more. multiple of 100 million VND. Meanwhile, issuing bonds to the public simplifies the above requirements.
Regarding procedural requirements: The condition of an individual issuer is to pay in full both principal and interest of the issued bonds or pay all debts due for 3 consecutive years before the new installment ( No requirements for securities companies and QLQLQ companies that are not public). Meanwhile, conditions for issuers public bonds are business activities of the year immediately preceding the year of registration for offering and must be profitable, with no accumulated losses up to the year of registration for offering…
Above is all the basic content about “Forms of bond issuance”. To receive consulting support from a team of experienced lawyers, please contact us – SLF Law Company Limited via:
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