Ho Chi Minh City, 26 May 2026
On 11 September 2025, the Government issued Decree No. 245/2025/ND-CP (“Decree 245”), amending and supplementing a number of provisions of Decree No. 155/2020/ND-CP (“Decree 155”), which provides detailed guidance for the implementation of the Law on Securities. Among the key amendments introduced under Decree 245, notable changes relate to the public issuance of vanilla bonds, particularly through the tightening of issuance conditions and the introduction of additional financial safety criteria aimed at strengthening market transparency, improving issuer discipline, and enhancing investor protection in the corporate bond market.
Expanded Credit Rating Requirement
One of the notable amendments concerns the credit rating requirement applicable to public bond issuances. Under the previous framework set out in Decree 155, an issuer was only required to obtain a credit rating from a credit rating agency licensed by the Ministry of Finance (“MOF”) where (i) the aggregate par value of bonds issued within the 12 months preceding the issuance exceeded VND 500 billion (approximately US$20 million) and 50% of the issuer’s equity; or (ii) the total par value of all outstanding bonds at the time of issuance registration exceeded 100% of the issuer’s equity.
Decree 245 significantly expands the scope of this requirement by mandating that all public bond issuances, except for bonds issued by credit institutions or bonds fully guaranteed by credit institutions, must have a credit rating from an independent credit rating agency, including Moody’s, Standard & Poor’s, Fitch Ratings, or a credit rating agency licensed by the MOF. This amendment is intended to enhance market transparency and improve risk assessment for both issuers and investors by requiring an independent evaluation of the issuer’s financial capacity and repayment ability prior to issuance.
In addition, to mitigate potential conflicts of interest, Decree 245 expressly requires that the credit rating agency must not be a related person of the issuer. This requirement reinforces the independence and reliability of the credit rating process, thereby contributing to greater credibility of bond issuances in the market.
Bondholder Representation Requirement
Decree 245 also introduces additional safeguards designed to strengthen investor protection and improve post-issuance oversight, including the mandatory appointment of a bondholder representative. Under Decree 155, the bondholder representative must be either a depository member of the Vietnam Securities Depository and Clearing Corporation (VSDC) or a fund management company. Acting on behalf of bondholders and safeguarding their lawful rights and interests, the bondholder representative is responsible for, among other matters, monitoring the issuer’s compliance with commitments under the bond issuance dossier and transaction documents, serving as a communication intermediary between bondholders, issuers, and relevant parties, requiring relevant parties to perform their obligations, and reporting to the State Securities Commission where issuer violations are identified that may adversely affect bondholder interests.
This mechanism is expected to strengthen investor protection by creating a more structured monitoring framework throughout the bond lifecycle, particularly in relation to disclosure obligations, use of proceeds, and fulfillment of payment obligations by issuers, thereby strengthening protection for bondholders.
Debt-to-Equity Ratio Requirement
Decree 245 further introduces a financial safety threshold requiring that an issuer’s overdue payables, including the value of bonds proposed to be issued (excluding bonds issued for debt restructuring purposes), must not exceed five times the issuer’s equity. This requirement does not apply to bond issuances for real estate projects, nor to regulated financial institutions such as credit institutions, insurance enterprises, reinsurance enterprises, insurance brokerage companies, securities companies, and fund management companies. In addition, where bonds are issued through multiple tranches, the aggregate par value of bonds proposed to be issued in each tranche must not exceed the issuer’s equity. However, bonds fully guaranteed as to principal and interest by credit institutions are also exempt from the debt-to-equity ratio requirement, on the basis that repayment risks are substantially mitigated by the credit support and financial capacity of the guaranteeing institution.
These requirements are intended to reduce financial pressure on issuers, prevent excessive leverage, and mitigate systemic risks in the bond market, while simultaneously providing an additional layer of protection for investors.
Conclusion and Outlook
Taken as a whole, the amendments introduced under Decree 245 signal a clear policy direction toward strengthening transparency, improving financial discipline, and restoring investor confidence in Vietnam’s corporate bond market. Looking ahead, the regulatory tightening process is expected to continue. In particular, amendments relating to private placement bond issuances are anticipated in the near future, as the Government is currently preparing a separate amending decree for the private bond market framework. These upcoming changes are likely to further reshape Vietnam’s bond market toward a more transparent, disciplined, and institutionally resilient market structure.
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For issuers, investors, and market participants navigating Vietnam’s evolving bond market, early legal assessment is key. Contact Indochine Counsel via email info@indochinecounsel.com or +84 28 3823 9640 for tailored advice on bond issuance, capital market compliance, and investor protection requirements.
