In response to the recent scandals of private issuance of corporate bonds, the Government has introduced several major changes to Decree 153/2020 on private issuance of corporate bonds in Vietnam. In particular, Decree 65/2022 amending Decree 153/2020 was issued in September 2022 and took effect immediately. We discuss below the key changes introduced by Decree 65/2022 which apply mostly to private domestic issuance of corporate bonds.

· Use of proceeds. Issuance of bonds to finance working capital or internal capital restructuring is no longer permitted. Issuance of bonds to refinance existing debt is still permitted. A bond issuer must now report how it uses the proceeds from bond issuance every six months. And the report must be verified by a qualified auditing company. When issuing a new bond, the bond issuer must also disclose how it uses the proceeds from earlier issuance in the issuance documents or the bond issuance plan.

· Voting of bond holders. Decree 65/2022 expressly allows bond holders holding 65% or more of the outstanding bond to have the right to (1) approve changes to bond terms and conditions; (2) approve the issuer’s remedial plan if the issuer breaches the bond issuance plan or the law; and (3) change of the bond holders’ representative. Decree 65/2022 requires the minimum voting threshold of a bondholder meeting is 65% of the outstanding bond.