HoREA proposes banks be allowed to buy corporate bonds for debt restructuring

HCMC – The HCMC Real Estate Association (HoREA) has proposed changing corporate bond regulations to allow banks to buy corporate bonds for debt restructuring.

The association called for adjustments to specific provisions in the central bank’s Circular 22/2019, which governs banks’ limits and prudential ratios, including at foreign bank branches.

The proposed changes involve extending the compliance timeline by 12 months for banks to adhere to the maximum ratio of short-term capital utilized for medium and long-term loans.

Clause 5, Article 16 of Circular 22 states that local banks and foreign bank branches must maintain the maximum short-term capital ratio for offering medium-term and long-term loans at 34% from October 1, 2021 to September 30, 2022. Afterward, the ratio should decrease to 30% from October 1, 2023 onward.

If accepted, this would postpone the implementation date to October 1, 2024.

HoREA also sought to eliminate specific clauses from the circular, permitting banks to purchase corporate bonds for debt restructuring purposes in alignment with the stipulations in Government Decree 65/2022.

The association underscored that this modification could enhance consistency within the legal framework and streamline debt restructuring efforts in accordance with the law.

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