In furtherance of the Government�s Decree No.01/2000/ND-CP of January 13, 2000 on the Regulation on issuance of Government bonds; after consulting the State Securities Commission; the Ministry of Finance hereby guides the bidding for Government bonds through the central securities trading market as follows:

I. GENERAL PROVISIONS

1. The Government bonds to be bid through the central securities trading market are treasury bonds and investment bonds with a term of one year or more.

Bonds of the same issuance series shall be stipulated uniformly, bearing the same issuance date and the same maturity date.

2. The Government bonds to be bid through the central securities trading market shall be listed and traded at the Securities Trading Center (the STC) and the Stock Exchange (the SE).

3. Basing itself on the annual capital mobilization plans of the State budget and the investment bond mobilization plans of the ministries and branches, the People�s Committees of the provinces and centrally-run cities and the Development Assistance Fund, which have already been approved by the Prime Minister; the Ministry of Finance shall work out the quarterly detailed plans for Government bonds bidding, according to the bonds� terms, which shall be notified to investors so that the latter can devise their own plans for participation in the market.

4. The Government bonds bidding shall be conducted by the STC and the SE according to provisions of this Circular and specific guidance of the State Securities Commission. The STC and the SE shall act as agents for the Finance Ministry in considering and approving members to participate in the bidding market, receiving bids, making bid evaluation and announcing bidding results, and shall enjoy a commission as prescribed at provisions in Point 10.3, Section 10, Part II of this Circular.

II. SPECIFIC PROVISIONS

1. Bidding principles:

1.1. All information of organizations participating in bidding and interest rates directed by the Ministry of Finance (if any) must be kept secret.

1.2. Bidding shall be conducted publicly, with equality in interests and obligations among the participating organizations.

1.3. The bid-winning organizations shall have to purchase the Government bonds in bid-winning volumes and at bid-winning interest rates already notified to them.

2. Bidding forms:

The Government bonds bidding shall be conducted in two forms: competitive bidding and non-competitive bidding.

- Competitive bidding is the interest-rate bidding. Through competitive bidding, the bid-winning interest rates and volumes of participating members shall be formulated.

- Non-competitive bidding is the registration for the purchase of Government bonds at bid-winning interest rates formulated from the competitive bidding results.

For each issuance series, the Ministry of Finance may stipulate the bidding form to be either the competitive bidding or both the competitive and non-competitive bidding. In cases where both competitive and non-competitive bidding forms are applied, the volume of bonds opened to non-competitive bidding shall not exceed 30% of the total volume of bonds planned to be issued for such bidding round.

3. Conditions for participating in bidding through the central securities trading market:

Subjects defined in Items a, b, c and d, Point 2, Article 18 of the Regulation on issuance of Government bonds, promulgated together with the Government�s Decree No.01/2000/ND-CP of January 13, 2000, that wish to participate in the bidding for Government bonds through the central securities trading market must satisfy the following conditions:

- Having the legal person status and having been established according to the current Vietnamese law;

- Having a minimum legal capital of 22 billion Vietnam dong (VND);

- Conducting efficient business activities and having a healthy financial status;

- Having VND accounts opened at banks under the regulations of STC and SE;

- Having filed applications for participation in the Government bonds bidding to the STC and/or the SE.

Annually, the STC and the SE shall consider conditions of subjects, then grant or withdraw certificates of members participating in the Government bonds bidding.

4. Forms of selling bonds:

The Government bonds to be bid through the central securities trading market shall be sold in the following forms: discount, at prices equal to their par-value, higher than their par-value or lower than their par-value.

5. Forms of bonds:

Bonds to be bid through the central securities trading market shall be issued in the forms of certificate or book-entry.

- For those in form of certificate: the Ministry of Finance shall set model form and organize the printing thereof, then supply them to the bid-winning organizations.

- For those in form of book-entry: the STC, the SE and custody organizations shall make book entries and keep relevant books.

The Government bonds, as they are newly issued, shall come in form of book-entry. In cases where bond owners wish to receive bond certificates, custody organizations shall have to report such to the Finance Ministry, for granting of bond certificates, and at the same time notify the STC and the SE thereof, for coordination in carrying out the procedures to correspondingly reduce the book entries of Government bonds.

6. Organizing the Government bonds bidding:

6.1. Time to organize bidding:

The bidding shall be organized weekly, monthly or quarterly, based on the capital mobilization plans of the State budget, the ministries, branches, the People�s Committees of the provinces and centrally-run cities and the Development Assistance Fund, and on the capital-market situation.

6.2. Bidding notices:

Two days before the bidding is organized, basing itself on the Finance Ministry�s issuance request, the STC or the SE shall send the Government bond issuance notices to members participating in the bidding and announce it on the mass media.

6.3. Bidding registration:

- Before 13:00 hrs on the bid-opening date, the members participating in the bidding shall have to send in their tender tickets to the STC or the SE and complete the depositing of 5% of the tendered bond volume.

- Form and mode of sending in tender tickets and making deposits shall be stipulated by the STC and the SE.

6.4. Bid opening:

The bid opening time point shall be 13:30 hrs on the bid opening date. The order and procedures for opening tender tickets and checking their legality and validity shall be prescribed and carried out by the STC and the SE.

6.5. Determination of bid-winning bond volumes and interest rates:

a/ Bases for determining bid-winning bond volumes and interest rates:

- Tendering volumes and interest rates of bidding participating organizations.

- Bond volume projected to be issued and directed interest rates (if any).

b/ Principles for determining bid-winning volumes and interest rates:

- For subjects participating in competitive bidding:

The bid-winning bond volumes shall be considered and selected out according to tendering interest rates from lower to higher ones. In cases where the tendering bond volume at the highest bid-winning interest rate exceeds the bond volume projected to be issued, the bid-winning bond volume shall be divided to each tender ticket in proportion to the tendering bond volume at such interest rate;

The highest bid-winning interest rate is the issuance interest rate to be applicable to all bid-winning subjects.

- Subjects participating in non-competitive bidding shall be entitled to purchase bonds at the bid-winning interest rate(s). The volume of bonds issued to such subjects shall be divided in proportion to the bond volume subscribed by each subject.

6.6. Determining bond selling price and the money amount to be paid when bonds become mature:

a/ Selling bonds in form of discount:

- The bond selling price is determined according to the following formula:

MG

G = �����

(1+ Ls)n

T = MG x (1 + Ls)n

L L L MG
G = ����� + ����� + ... + ������ + ������
Ls Ls Ls Ls
[1+ ��]1 [1+ ��]2 [1+ ��]t [1+ ��]t
k k k k

Ls

Substituting "r" for ��� ,

k

Then the formula for calculating the bond selling price shall be simplified as follows:

1
L x [1 - ���� ]
(1+ r)t MG
G = �������������� + ����
r (1 + r)t

In which:

G: Bond selling price

L: Periodically paid interest amount

MG: Bond par-value

Ls: Bid-winning interest rate (%/year)

k: Number of interest payment times in a year

t: Interest payment periods throughout the bond term

c.3. The periodically paid interest amount shall be calculated according to the following formula:

Lt
L = MG x ����
k

In which:

L: Periodically paid interest amount

MG: Bond par-value

Lt: Periodical interest rate (%/year)

k: Number of interest payment times in a year

c.4. When bonds mature, their owners shall be paid the principal equal to the bonds� par-value and the interest amount of the last interest payment time.

6.7. Announcement of bidding results:

- After completing the determination of bid-winning interest rates and volumes, the STC and/or the SE shall sign for certification the bidding result sum-ups and then send them to the Finance Ministry and concurrently to the State Securities Commission.

- Basing themselves on the bidding-result sum-ups, the STC and/or the SE shall send notices thereon to the units having participated in the bidding, and announce the bidding results on the mass media and post them up at their head offices.

7. Payment for the Government bond purchase:

7.1. Within 2 working days following the bidding date, the bid-winning units shall have to transfer the total sum of money for bond purchase at the selling price stated in the bid-winning notices into the State Treasury�s account(s) opened at the State Bank�s Transaction Bureau.

7.2. The bond issuance date is fixed to be the second working day following the bidding date. On the issuance date, the State Bank�s Transaction Bureau shall make a credit notice of the Government bond sale proceeds collected from bid-winning organizations to the State Treasury, and at the same time notify the STC and the SE thereof. Basing themselves on the notice of the State Bank�s Transaction Bureau, the STC and the SE shall carry out the procedures to make bond register entries for bid-winning organizations.

7.3. In cases where bid-winning members carry out the payment procedures behind the dealine, the STC and the SE shall request the banks where the bidding organizations have opened their accounts to deduct and transfer part of deposits and deposit accounts to the State Treasury. Organizations that delay their payments shall be fined therefor. The fines shall be deducted from such organizations� deposit accounts and remitted to the State budget. The fines for delayed payment shall be determined according to the following formula:

(St x Ls x 150%) x n
P = ������������
365

In which:

P: Fines for delayed payment

St: Delayed payment amount

Ls: Bid-winning interest rate (%/year)

n: Number of days of delayed payment

In cases where the payment is made later than 5 days behind the deadline while, the balance on deposit accounts of the bid-winning members is still not enough for the payment, the unpaid bid-winning part shall be canceled and the concerned units shall be subject to a fine equal to 5% of the canceled amount, which shall be remitted to the State budget.

8. Transfer of capital mobilized from the Government bond issuance:

Basing itself on the credit notice of the State Bank�s Transaction Bureau, the Central State Treasury shall carry out the procedures for:

- Making the central budget�s revenue entries for treasury bonds.

- Making the central budget�s revenue entries for investment bonds to mobilize capital for centrally-managed projects. The ministries and branches shall acknowledge debts being bond issuance money amounts owed to the State Treasury as from the bond issuance date.

- Making the provincial budgets� revenue entries for investment bonds to mobilize capital for locally-managed projects. The People�s Committees of the provinces and centrally-run cities shall acknowledge debts being investment bond issuance money amounts owed to the State Treasury as from the bond issuance date.

- Crediting to the accounts of the Development Assistance Fund. The Development Assistance Fund shall acknowledge debts being investment bond issuance money amounts owed to the State Treasury as from the bond issuance date.

9. Settlement of the Government bonds when they mature:

9.1. For non-custodial bonds:

The payment of bond principals and interests shall be made at the State Treasury or the Government bond payment agents. One day prior to the maturity date for principal and interest payment, the Finance Ministry (or the provincial/municipal Finance and Pricing Services or the Development Assistance Fund) shall carry out the procedures for transferring capital to the State Treasury or the payment agents, so that the latter make payments to the bond owners. The State Treasury and the payment agents shall enjoy a commission on the principal and interest amounts actually paid.

9.2. For custodial bonds:

The payment of bond principals and interests shall be made at the bond custody organizations. One day prior to the maturity date for principal and interest payment, the Finance Ministry (or the provincial/municipal Finance and Pricing Services or the Development Assistance Fund) shall carry out the procedures for transferring capital amounts to the STC and the SE, so that the latter forward them to the custody organizations to make direct payments to the bond owners. The STC, the SE and the custody organizations shall enjoy a commission on the bond principal and interest amounts paid. The division of the Government bond payment commission among the STC, the SE and the custody organizations shall be effected according to the agreement reached among the concerned parties.

10. The funding for the Government bond issuance and settlement:

10.1. The funding source for organizing the issuance and settlement of the Government bonds shall be supplied by the central budget (for treasury bonds and bonds for centrally-managed projects), the local budgets (for bonds for locally-managed projects), and the Development Assistance Fund (for investment bonds to mobilize capital for the Fund).

10.2. Expenses for printing Government bond certificates shall be paid to the printing agencies under contracts.

10.3. Expenses for organizing the bidding of Government bonds shall be paid to the STC and SE, and equal to 0.1% of the total bid-winning bond value.

10.4. Expenses for paying Government bonds shall be paid to the units performing the payment tasks and equal to 0.1% of the principal and interest amount actually paid.

10.5. The STC, the SE, the custody organizations, the State Treasury and the Government bond payment agents shall have to use expenses for the bond issuance and payment strictly according to the financial regime prescribed for such units.