(Mr): Phung Xuan Minh, [Chairman of the Board of Directors of Saigon Ratings].
As the Vietnamese economy enters a new phase of development, the need for medium and long-term capital mobilization by businesses is increasing. Along with bank credit, the corporate bond market and other debt instruments are becoming important resources for financing production, infrastructure investment, business expansion, and enhancing competitiveness.
However, the development of the capital market requires not only scale, but also quality, discipline, and trust. Following the volatility of the corporate bond market in recent years, investors are increasingly concerned about the debt repayment capacity, financial health, cash flow, governance capabilities, and transparency of issuers. This is why corporate credit ratings and debt instruments are playing an increasingly essential role in the modern financial ecosystem.
According to the World Bank, Vietnam’s economy is projected to grow strongly in 2025 and continues to maintain positive growth prospects in the coming years, despite remaining impacts from global trade, automation, and climate risks. This indicates that Vietnam has many opportunities for development, but also demands a financial market that operates transparently, professionally, and with better risk assessment capabilities.
What is a credit rating?
Credit rating is an independent assessment of the creditworthiness, ability to meet financial obligations, and credit risk level of a business, issuer, or specific debt instrument. In other words, credit ratings help the market answer a core question: does the business have the capacity and willingness to repay its debts on time?
For businesses, credit ratings reflect overall financial quality, including cash flow generation capacity, capital structure, debt history, liquidity, industry prospects, governance quality, and transparency.
For debt instruments, such as corporate bonds, credit ratings focus on assessing the ability of the instrument itself to repay the principal and interest. A company may be rated at a certain level, but different bond issues may have varying levels of risk, depending on the collateral, payment priority, maturity, issuance conditions, and commitments to investors.
It is important to emphasize that credit ratings are not guarantees of payment and are not advice to buy, sell, or hold bonds. They are independent risk assessment tools that provide investors, issuers, and regulators with a basis for making decisions.
The significance of credit ratings for businesses.
First and foremost, credit ratings help businesses enhance transparency. When assessed by an independent credit rating agency, businesses must provide complete information and explanations about their business model, financial strategy, cash flow, and debt repayment capacity. This process not only serves investors but also helps the business itself objectively assess its financial health.
Secondly, credit ratings contribute to improved access to capital. A business with a good credit rating typically has an advantage when raising capital from the bond market, borrowing from financial institutions, or accessing professional investors. When risks are clearly quantified, businesses can build better trust with the market.
Thirdly, credit ratings create positive pressure for businesses to improve their governance standards. To maintain or improve their rating, businesses need to manage debt prudently, control cash flow, disclose information transparently, and maintain a sustainable development strategy. This is an important impetus for businesses to shift from a mindset of “raising capital through connections” to “raising capital through creditworthiness.”
In the long term, businesses with a good credit history will have the opportunity to reduce capital costs, expand their investor base, and enhance their brand reputation in the financial market.
Role for investors
For investors, credit ratings are a tool to help identify risk. In the bond market, high yields are often accompanied by high risk. Without complete information, investors can easily focus only on interest rates and overlook the issuer’s actual ability to repay the debt.
A credit rating report helps investors better understand the issuing company, including its financial situation, operating cash flow, leverage level, maturity pressure, industry outlook, and factors that may affect its ability to repay. This allows investors to compare different companies and debt instruments, and choose a product that suits their risk tolerance.
In particular, for institutional investors such as investment funds, insurance companies, banks, securities firms, or pension funds, credit ratings are a crucial part of their risk management system. They also form the basis for building a disciplined investment portfolio, rather than relying too heavily on emotion or unofficial information.
Role in the bond market and capital market
A sustainably developed capital market cannot rely solely on issuance growth. More importantly, it must focus on the quality of financial products, the transparency of issuers, and the ability of investors to assess risk.
Credit ratings help the corporate bond market operate on a more transparent principle. When risks are clearly categorized, companies with strong financial foundations will be appropriately recognized by the market. Conversely, companies with higher risk levels must accept capital costs that are more in line with their credit profile.
This helps establish a reasonable interest rate environment, reduces the practice of “risk equalization,” and limits investors from buying bonds solely because of high interest rates without understanding the credit quality. When information is standardized, the market will have a basis for more efficient capital allocation, thereby supporting sustainable economic growth.
The legal framework in Vietnam is also undergoing adjustments aimed at enhancing transparency and protecting investors. Decree 245/2025/ND-CP, amending and supplementing Decree 155/2020/ND-CP on the Securities Law, which includes provisions related to independent credit rating agencies and securities issuance conditions, is a notable milestone in the process of perfecting the capital market.
Credit ratings in the current economic and financial context.
In 2025, Vietnam’s GDP at current prices is estimated to reach VND 12,847.6 trillion, equivalent to approximately US$514 billion, indicating continued economic expansion. As the economy grows, so does the capital needs of businesses, particularly in infrastructure, energy, industrial real estate, logistics, consumer finance, and green transformation.
However, the faster the growth, the greater the demand for risk management. Businesses need capital, but the market needs confidence. Investors are willing to provide capital, but they need reliable information. Regulators want to develop the market, but must ensure the safety of the system. In this three-way relationship, credit ratings act as a “common language” for assessing risk, valuing capital, and building confidence.
For Vietnam, developing credit rating services is not solely for the corporate bond market. It is also a crucial step in upgrading the national financial infrastructure, aligning with international best practices, and increasing the attractiveness of the capital market to domestic and foreign investors.
Notably, Moody’s upgraded Vietnam’s national credit outlook from “stable” to “positive” in May 2026, while maintaining its Ba2 rating, citing improvements in institutional quality and the ability to strengthen its credit profile in the medium term. This is a positive signal at the national level and highlights the importance of credit confidence in attracting capital and economic development.
Conclusion: Trust is a strategic asset for businesses.
In the modern economy, capital seeks not only high returns but also transparency, debt repayment capacity, and lasting credibility. Therefore, corporate credit ratings and debt instrument ratings are not merely technical requirements, but a foundation for fostering a transparent financial culture.
For businesses, credit ratings are an opportunity to affirm their financial capacity and enhance their reputation in the market. For investors, it is a tool to help identify risks and make responsible decisions. For the capital market, credit ratings contribute to strengthening discipline, standardizing information, and promoting efficient capital allocation.
In the context of Vietnam’s move towards a more professional, transparent, and internationally integrated financial market, credit ratings should be seen as an essential component of market confidence. Ultimately, in finance, trust is not just an ethical value; it is an asset, a competitive advantage, and the foundation for sustainable business development.
Saigon Ratings [06-May-2026]
