Moody's enters the Vietnamese rating market through a joint venture

Moody's stated in a late-Tuesday statement that Vietnam Investors Service and Credit Rating Agency (VIS Rating), in which it holds a 49% ownership, will provide credit rating services to local business issuers, noting that outstanding bonds in Vietnam were worth 13% of the country's economy.

The approval comes after a lengthy effort by Moody's and US officials to get the license, and it comes just after US President Joe Biden strengthened diplomatic ties with Vietnam during a visit to Hanoi earlier this month.

After property developers and other industries accrued excessive debt, Vietnam recently tightened limits on privately placed bonds, but the implementation of some of the new laws has been delayed due to volatility in the corporate bond market and the real estate industry.

According to the latest report published this week by the Vietnam Bond Market Association (VBMA), no corporate bonds were issued in the nation in September.

Under the new guidelines, which are slated to go into effect next year, firms that sold bonds worth more than 500 billion dong ($20.58 million) in the previous 12 months or more than half of the company's ownership would be required to get credit ratings for fresh placements.

"As Vietnam's domestic bond market develops, credit ratings and research will play an important role in assisting companies in accessing new capital, developing funding strategies, signaling transparency, and maintaining investor confidence during times of market stress," stated Moody's.

FiinRatings, Vietnam's other licensed credit rating firm, has a collaboration with Moody's rival S&P Global Ratings. According to FiinRatings, Japan's Nikkei maintained a 17% ownership in the firm until 2020.

Source: Reuters