On November 6, 2024, the Minister of Finance issued Circular 76/2024/TT-BTC ("Circular 76") providing guidance on information disclosure and reporting regimes related to the private placement and trading of corporate bonds in the domestic market as well as the offering of corporate bonds in international markets. This Circular replaces Circular 122/2020/TT-BTC ("Circular 122"). Key additional provisions under Circular 76 include:
1. Additional Information Disclosure Requirements Before Bond Issuance
To enhance state management and minimize risks for investors, Circular 76 introduces stricter requirements for pre-issuance disclosure through a standardized information disclosure template. Key additions include:
a) Credit Rating Results: Including mandatory and optional credit ratings.
b) Details of Relevant Parties: Information on the bank holding the bond purchase account, the asset management agent, credit rating agencies, advisors for green bond certification, etc.
c) Contact Information of the Issuer: Address for accessing bond issuance documentation.
d) Financial Information of the Issuer: Including invested capital, post-tax profit reserves, total liabilities (including bank loans and bond liabilities), solvency, bond debt-to-equity ratio, profitability, and other financial indicators.
e) Outstanding Bond Status: Total volume of issued bonds, interest and principal repayments, etc.
f) Investor Rights and Responsibilities.
g) Details of Secured Assets: Value of secured assets/guarantees, the ratio of secured asset value to the total anticipated issuance, and specifics on the form of security (including valuation methods and organizations).
h) Utilization Plan for Proceeds: Details on the programs or projects for which the proceeds will be utilized.
i) Supporting Documents: To validate the accuracy and authenticity of disclosed information, such as business registration certificates, financial statements, periodic reports on using proceeds, documentation of secured assets, etc.
2. Additional Periodic Financial Disclosure Requirements
Circular 76 introduces new requirements for periodic financial disclosures compared to Circular 122, including:
a) Total Liabilities: Including bank loans and bond-related liabilities.
b) Solvency.
c) Issued Bond Debt-to-Equity Ratio.
d) Net Profit.
e) Profitability Ratios.
f) Financial Safety Indicators: Such as capital adequacy ratios and other measures of financial stability.
With these comprehensive additions, Circular 76 aims to enhance transparency in the corporate bond market, minimize violations, and restore investor confidence.
Circular 76 takes effect on December 25, 2024./.
Comment: