Raising Capital Through Bonds Is No Longer About Needing Money – It Is About Deserving Investor Confidence

For many years, corporate bonds were often viewed as a fast-track financing channel for businesses seeking growth capital.

However, under Decree 200/2026/ND-CP, the rules of the game have fundamentally changed.

The bond market is no longer designed for enterprises that simply need capital. It is increasingly reserved for enterprises that can demonstrate repayment capacity, financial transparency, governance discipline, and long-term credibility.

For non-public joint-stock companies that are neither securities companies nor fund management companies, the legal framework governing private bond issuance has become substantially more demanding.

The message behind the regulation is clear:

Access to capital is no longer determined solely by financing needs.

It is determined by the ability to earn and maintain investor trust.

1. WHAT TYPES OF BONDS CAN A NON-PUBLIC JOINT-STOCK COMPANY ISSUE?

Under Decree 200/2026/ND-CP, non-public joint-stock companies may issue two principal categories of bonds:

Non-Convertible Bonds Without Warrants

These represent traditional debt instruments.

Investors lend money to the enterprise and receive interest payments and principal repayment according to agreed terms.

Convertible Bonds or Bonds with Warrants

These are hybrid instruments that combine characteristics of debt and equity.

Because they involve future conversion rights or rights to acquire shares, they may only be issued by joint-stock companies.

The distinction is significant because the issuance requirements, investor eligibility criteria, and approval mechanisms differ substantially between these two categories.

2. ISSUING A BOND IS NOT A FUNDRAISING EXERCISE – IT IS A CREDIBILITY TEST

For non-convertible bonds without warrants, Article 13 of Decree 200/2026/ND-CP requires enterprises to satisfy a comprehensive set of conditions.

Among the most important are:

A legally established and operating enterprise under Vietnamese law;
A proven track record of fulfilling debt obligations;
Compliance with applicable financial safety ratios;
Total liabilities (including the proposed bond issuance) not exceeding five times equity, subject to specific regulatory exceptions;
An approved bond issuance plan;
Audited financial statements for the preceding fiscal year;
Compliance with investor eligibility requirements.

The regulatory philosophy is particularly noteworthy.

Historically, many enterprises relied on collateral assets as the primary basis for fundraising.

Today, regulators increasingly focus on repayment history.

The market is moving from asking:

“What assets does the enterprise own?”

to asking:

“Has the enterprise consistently demonstrated the ability to repay its obligations?”

This shift reflects a more mature capital market philosophy.

Assets can fluctuate in value.

Trust, however, is built through demonstrated financial discipline.

3. CONVERTIBLE BONDS: WHEN DEBT BECOMES A CAPITAL STRUCTURE DECISION

For convertible bonds and bonds with warrants, legal requirements become even more stringent.

In addition to meeting the majority of the conditions applicable to standard bond issuances, the issuance plan must be approved by the General Meeting of Shareholders.

This requirement reflects an important reality:

A convertible bond is not merely a borrowing instrument.

It has the potential to alter ownership structures, shareholder rights, and long-term capital strategy.

Therefore, enterprises should approach convertible bond issuance not simply as a financing decision, but as a strategic corporate governance decision.

4. THE MOST IMPORTANT DOCUMENT IS NOT THE LEGAL DOSSIER

Many enterprises mistakenly believe that successful bond issuance depends primarily on completing legal documentation.

In reality, investors evaluate something far more important:

The Bond Issuance Plan

Under Article 10 of Decree 200/2026/ND-CP, the issuance plan must clearly explain:

The purpose of the issuance;
The intended use of proceeds;
Allocation by project and expenditure category;
Disbursement timelines;
Financial performance indicators;
Debt repayment capacity;
Sources of principal and interest repayment;
Mechanisms for monitoring and supervising the use of capital.

In practice, this document functions as a capital deployment roadmap.

Even when offered attractive interest rates, an enterprise with a weak issuance plan will struggle to earn investor confidence.

Because professional investors are not merely purchasing a bond.

They are evaluating management quality.

5. FROM THE BIZMAP & EDUBELIFE PERSPECTIVE:

CAPITAL MARKETS REWARD COMPETITIVENESS

Decree 200/2026/ND-CP signals an important evolution in Vietnam’s capital market.

Bond issuance is no longer a purely legal exercise.

It has become a comprehensive examination of enterprise capability.

The market is effectively assessing five dimensions simultaneously:

Financial Capability

Can the enterprise generate sufficient cash flow to service debt?

Accounting Transparency

Are financial statements reliable, auditable, and decision-useful?

Legal & Tax Governance

Are contracts, projects, collateral structures, and approvals legally robust?

Cash Flow Management

Can the enterprise monitor, allocate, and repay capital in a disciplined manner?

Investment Communication Capability

Can management present an investment narrative that is transparent, evidence-based, and credible?

An enterprise that attempts to issue bonds without first strengthening its finance, accounting, legal, and governance systems risks far more than regulatory non-compliance.

It risks losing market trust.

Conversely, enterprises that prepare thoroughly can transform bonds into a strategic instrument—not merely to borrow money, but to enhance their credit standing, market reputation, and long-term access to capital.

To be continued: