Banks are officially allowed to buy back unlisted corporate bonds
The State Bank issued a circular on credit institutions buying and selling corporate bonds to remove difficulties and promote the development of the corporate bond market in the current difficult situation.
The State Bank has just issued Circular No. 03/2023/TT-NHNN dated April 23 (Circular 03) stipulating the suspension of the implementation of Clause 11, Article 4 of Circular No. 16/2021/TT-NHNN dated November 10, 2021 (Circular 16) regulating the purchase and sale of corporate bonds by credit institutions and foreign bank branches.
This Circular takes effect from April 24. The application period is from today until December 31, 2023.
Accordingly, credit institutions (CIs) are allowed to buy back corporate bonds that are not listed on the stock market or not registered for trading on the Upcom trading system (unlisted corporate bonds) that the CIs have sold, or unlisted corporate bonds issued in the same lot/same issuance period as the unlisted corporate bonds that the CIs have sold.
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A series of new policies to support businesses. Photo: Hoang Ha |
Conditions for credit institutions to acquire unlisted Upcom trading systems include:
Corporate bonds meet the provisions of Article 4 of Circular 16. The buyer of these corporate bonds from a credit institution shall pay the entire amount of corporate bonds purchased at the time the credit institution signs the contract to sell corporate bonds to the buyer.
In addition, the bond issuing enterprise must be rated at the highest level according to the internal credit rating regulations of the credit institution at the most recent time before the credit institution purchases the Upcom trading system.
The issuance of Circular No. 03/2023/TT-NHNN aims to contribute to increasing liquidity, removing difficulties, and promoting the development of the corporate bond market in the current difficult situation according to the Government's policy and the Prime Minister's direction.
On the same day, the State Bank issued Circular 02 guiding credit institutions to restructure debt and maintain debt groups for businesses.
The simultaneous issuance of Circular 02 and Circular 03 by the State Bank of Vietnam is the result of a meeting between Prime Minister Pham Minh Chinh with the State Bank of Vietnam, the Ministry of Finance and the Ministry of Justice on the afternoon of April 22 to find solutions to remove difficulties for businesses with overdue debts, while also unblocking the corporate bond market.
