A new decree allowed VAMC to issue bonds to buy bad debts at market prices from April 5, 2015.
The Government has issue Decree No. 34/2015/ND-CP to amend and supplement Decree No. 53/2013/ND-CP dated May 18, 2013 on the establishment, organization and operation of Vietnam Asset Management Company (VAMC). Of which, the new Decree allowed VAMC to issue bonds to buy bad debts at market prices from April 5, 2015.
The bonds issued by VAMC are not required to apply the condition of bond release under the provisions of the Government. Additionally, VAMC is not restricted by the rule of raising capital as prescribed by the Government about the investment capital of the State in business and financial management of State-owned enterprises (SOEs).
VAMC is allowed to issue 4 models of bond such as bid bonds, guaranteed bonds, agent release and direct sale.
VAMC bonds are hold by credit institutions for the usage of participating in market transactions and refinancing at the State Bank, which specifies the issuance of VAMC’s bonds.
The new decree also removed the biggest problem, which is the property auction of nonperforming loan. Accordingly, after a failed auction, VAMC continues to sell the property through another auction or sell directly to the buyers.
Three cases are considered as unsuccessful auctions including absence in the auction, lack of bidder and other unsuccessful cases under the provisions of the auction's law.
According to the recent plan approved by the State Bank of Vietnam, VAMC are allowance to issue VND80-100 trillion ($3.7- 4.7 billion) of government bonds to buy bad debt.