70th anniversary of Hanoi's Liberation Day Vietnam - Asia 2023 Smart City Summit Hanoi celebrates 15 years of administrative boundary adjustment 12th Vietnam-France decentrialized cooperation conference 31st Sea Games - Vietnam 2021 Covid-19 Pandemic
Home / Economy
Moody's places Vietnam's Ba3 rating under review for downgrade
Anh Minh 18:35, 2019/10/09
During the review period, Moody`s will assess the practices and systems the government has or is instituting, to ensure reliable, timely, and smooth payment of all obligations.
Moody's Investors Service has today placed the Ba3 local and foreign currency issuer and senior unsecured ratings of the Government of Vietnam under review for downgrade.
Illustrative photo
Illustrative photo
The key driver behind Moody's decision to place Vietnam's rating under review for downgrade is institutional weaknesses, as revealed by delayed payments on an obligation by the government, the rating agency has said.

These weaknesses seem to reflect deficient coordination and planning among various arms of the government, with a degree of opacity around the decisions and actions needed to meet some of the government's obligations; and complex bureaucratic processes that can obstruct the smooth and timely payment of government obligations.

“While the information available so far points to no or minimal losses for creditors, the coordination gaps within the administration that the delayed payments may reflect, point to creditworthiness that may no longer be consistent with a Ba3 rating,” it said.

During the review period, Moody's will assess the practices and systems the government has or is instituting, to ensure reliable, timely, and smooth payment of all obligations.

Moody's would downgrade Vietnam's rating if the rating review concludes that administrative gaps are such that a non-negligible risk of future delayed payments remains.

Meanwhile, Moody's would maintain and confirm Vietnam's Ba3 rating if the rating review were to conclude that there is evidence of clear and effective steps being taken that offer very high confidence that all debt obligations will be honored in a smooth and timely manner.

Moody's expects to complete the review within three months.

Vietnam's long-term foreign currency (FC) bond ceiling at Ba1, its long-term FC deposit ceiling at B1, and its local currency bond and deposit ceilings at Baa3 are unchanged. The short-term FC bond and deposit ceilings remain unchanged at Not Prime.

Independent of the outcome of the rating review, Vietnam's credit profile will remain underpinned by strong growth potential. Absent significant economic or contingent liability shocks, Moody's expects the government's debt burden to remain broadly stable, just under 50% of GDP.
Other news
09:44, 2024/07/14
Hanoi's key industries in high recruitment demand
The city aims to help 165,000 people get hired this year.
19:19, 2024/07/13
Hanoi residents excited about iHaNoi’s potential to elevate travel and culinary experiences
Local insiders and residents offer suggestions to enhance iHaNoi's user experience.
18:44, 2024/07/13
New Housing Law to lift legal barriers to renovating old apartments in Hanoi
The 2023 Housing Law introduces several important changes to address these issues.
18:11, 2024/07/13
Continued political trust building between Vietnam and Cambodia
Both countries are committed to deepening defense and security cooperation, emphasizing the principle of not allowing hostile forces to use each other's territory to the detriment of the other.
11:02, 2024/07/13
Mobile Money users in Vietnam surpass 8.8 million
After the initial pilot phase, the Government issued Resolution No. 192 to extend the trial of the Mobile Money service until December 31, 2024.
16:14, 2024/07/12
Hanoi to host dialogue on challenges of social housing and car parks
The city has opened 72 public car parks, but this is well below the planned total of 1,620.