Moody’s changes Vietnam view to negative

Moody’s Investors Service said it confirmed the government of Vietnam’s Ba3 local and foreign currency issuer and senior unsecured ratings and changed the outlook to negative, concluding the review for downgrade started on Oct. 9.

“The negative outlook reflects some ongoing risk of payment delays on some of the government’s indirect debt obligations, in the absence of more tangible and significant measures to improve the coordination and transparency around debt management within the administration,” said Moody’s in a press release.

The ratings confirmation reflects Moody’s assessment that enhanced attention by the administration on forthcoming payments of all the government’s obligations, direct and indirect, reduces the risk of renewed payment delays.

The Ba3 rating is underpinned by strong growth potential and economic diversification, supporting the economy’s capacity to absorb shocks, including a prolonged slowdown in global trade. The rating also reflects Moody’s estimate the government’s direct debt burden will decline gradually from moderately high levels and debt affordability will improve.

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