Chapter III

TYPES OF ENTERPRISE BONDS

Section 1. CONVERTIBLE BONDS

Article 20.- Issuers of convertible bonds

Convertible bonds shall be issued by joint-stock companies.

Article 21.- Principles of issuance of convertible bonds

1.At the time of issuance of bonds, information on bond conversion conditions, conversion period and conversion ratio, the range of share price fluctuations, the purpose of use of the proceeds from the issuance of bonds and other benefits of bondholders shall be made public.

2. The rate of participation by foreign parties in Vietnamese enterprises shall be ensured according to the Prime Minister's regulations in each period.

3. The total quantity of issued bonds shall not exceed the approved issuance limit.

Article 22.- Bond conversion period

The bond conversion period shall be determined by issuing organizations and made public to investors at the time of issuance of bonds.

Article 23.- Bond conversion ratios

1. Bond conversion ratios shall be determined by issuing organizations at the time of issuance.

2. At the time of bond conversion, if the share price changes beyond the range of share price fluctuations announced at the time of issuance of bonds, enterprise owners may adjust the bond conversion ratios as appropriate.

Article 24.- Assurance of payment of convertible bonds

1. Convertible bonds may be secured or unsecured.

2. Bonds shall be secured by the following modes:

a/ Payment underwriting by financial or credit institutions;

b/ Security with assets of issuing organizations;

c/ Security with assets of a third party.

3. The Ministry of Finance shall specify the assurance of payment of issued bonds.

Article 25.- Right certificates issued together with convertible bonds

1. Right certificates issued together with convertible bonds shall certify bondholders' right to buy a certain quantity of ordinary shares of issuing organizations under given conditions.

2. Upon issuance of bonds, issuing organizations shall disclose information relating to right certificate holders' right to buy ordinary shares on:

a/ Conditions for right certificate holders to by ordinary shares.

b/ Quantity of shares which each right certificate-holding unit is entitled to buy.

c/ Other benefits and liabilities of right certificate holders.

Section II. INCONVERTIBLE BONDS

Article 26.- Issuers of inconvertible bonds

1. State enterprises.

2. Joint-stock companies.

3. Limited liability companies.

4. Foreign-invested enterprises in Vietnam.

Article 27.- Principles of issuance of inconvertible bonds

1. The purpose of use of the proceeds from the issuance of bonds shall be made public.

2. The total quantity of issued bonds shall not exceed the approved issuance limit.

Article 28.- Assurance of payment of inconvertible bonds

Inconvertible bonds may be secured or unsecured.

The assurance of payment of inconvertible bonds shall comply with the provisions of Article 24 of this Decree.

Article 29- Right certificates issued together with inconvertible bonds

1. Only joint-stock companies may issue right certificates issued together with inconvertible bonds.

2. The issuance of right certificates together with inconvertible bonds shall comply with the provisions of Article 25 of this Decree.

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