Strict regulation of the corporate bond market must not cause the market to collapse | Business

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According to the draft, private placement corporate bond issuers must meet the following conditions: profitable business results in the previous year; the total outstanding amount of bonds does not exceed three times equity; with guarantees if total outstanding debt exceeds equity.

“A lot of people say the corporate bond market is risky and needs tightening. However, improving the legal system does not mean tightening it up. Instead, it is necessary to ensure that information reaches the market in an open, transparent and accurate manner,” said lawyer Truong Thanh Duc, director of ANVI law firm. According to him, it is important now to focus on credit development. rating regulations. In the immediate term, it is possible to follow the regulations by making compromises. For example, a company with credit rating results will not need, or will need, one or two additional conditions for issuance, because credit rating has covered many If there is no credit rating, issuers must make a compromise by fulfilling dozens of conditions.

According to experts, the credit rating will help investors easily determine the quality of the company and the level of risk of the bonds issued and is the basic solution often used by countries. Therefore, it is necessary to have credit rating regulations to help investors easily determine the quality of the company and the level of risk of the bonds issued. In this case, it is necessary to identify the cases where credit rating is required or encouraged, as well as to clarify the roles and responsibilities of credit rating agencies.

Regulations on professional securities investors also confuse economic experts. According to the draft, individual professional investors must hold a portfolio of securities of at least 2 billion VND (86,477.2 USD) certified by a securities company at the time of being identified as a professional securities investor. “So who are they after this moment?” Mr. Phan Duc Hieu, permanent member of the Economic Commission of the National Assembly, raised the issue. He shared that according to the US Securities Act of 1933 as amended in 2010, the designated investor must have a minimum asset of US$200,000 and must always maintain it for two consecutive years, not just then. In 2020, the United States revised and added new professional capacity regulations.

Mr. Dau Anh Tuan, Deputy Secretary General, Head of the Legal Department of the Vietnam Chamber of Commerce and Industry, also said that investors could easily evade the draft regulations by buying government bonds or securities during a short time, then reselling them. Therefore, it is necessary to amend the regulation that professional securities investors must own and maintain investments in securities for two consecutive years, with a minimum value of VND 2 billion.

By the end of 2021, almost VND 1.2 quadrillion had been raised by companies through the bond channel, representing around 12% of the economy’s total credit balance and around 15% of GDP. This proportion is expected to reach 20% of GDP in 2025 and 25% of GDP in 2030. In addition to bank credit capital, by 2030 Vietnam needs to mobilize VND 700 trillion – VND 1 quadrillion of medium and long-term capital. term each year.

Meanwhile, the commercial banking system is overloaded with long-term loans. Therefore, the channel for raising capital through the corporate bond market is extremely important. Therefore, it is necessary to correct and fill in the gaps. However, this must be done in a way that does not hamper the development of the corporate bond market and, at the same time, carefully consider intervention measures that could lead to a market collapse.

By Ha My – Translated by Bao Nghi

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