Tightening conditions for public offering of bonds

The Government has just issued Decree No. 245/2025/ND-CP dated September 11, 2025 amending and supplementing a number of articles of Decree No. 155/2020/ND-CP detailing the implementation of a number of articles of the Securities Law.

One of the notable points of Decree No. 245/2025/ND-CP is to tighten the conditions for public offering of bonds, adding financial safety criteria.

According to current regulations in Article 19 of Decree No. 155/2020/ND-CP, to offer bonds to the public, issuers or bonds registered for sale must only have a credit rating if the total value of bonds mobilized in each 12 months is greater than VND 500 billion and greater than 50% of equity; or the total outstanding bonds are greater than 100% of equity.

In addition to the above regulation, there are no restrictions on the fact that enterprises must meet the debt ratio on equity to be able to issue bonds to the public.

This leads to many businesses issuing bonds but not ensuring payment capacity, causing losses to investors.

Therefore, Decree No. 245/2025/ND-CP has amended Clause 2, Article 19 of Decree No. 155/2020/ND-CP as follows: The issuing organization or the bond registered for sale must be credit rated by an independent credit rating agency, except for the case where the bond issued by a credit institution or the bond is credit institution, foreign bank branch, foreign financial institution, international financial institution guarantees the full principal and interest payment of the bond.

The credit rating agency is not a related person of the issuing organization.

In addition, Decree No. 245/2025/ND-CP also adds Clauses 3, 4, 5, 6, 7 after Clause 2, Article 19 on the conditions for public offering of bonds as follows:

There is a representative of the bond owner as prescribed in Article 24 of this Decree.

The issuing organization has a debt to be paid (including the value of the expected issuing bonds) not exceeding 5 times the issued organization's equity according to the most recent audited financial statements.

Except for issuing entities such as state-owned enterprises and enterprises issuing bonds to implement real estate projects, credit institutions, insurance companies, reinsurance companies, insurance brokerage companies, securities companies, and securities fund management companies.

Outstanding loans payable according to regulations do not include the value of bonds expected to be issued to restructure the debt. In case of issuing bonds to the public to restructure debts, enterprises are not allowed to change the purpose of capital use to restructure debts.

In case the enterprise issues bonds to the public for many auctions, the value of the bond expected to be issued in one package at a face value not greater than equity.

The issuing bonds are guaranteed by credit institutions, foreign bank branches, foreign financial institutions, and international financial institutions to pay all principal and interest of the bonds, except for the prescribed conditions.

Decree No. 245/2025/ND-CP takes effect from September 11.

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