Credit rating
Presented by group 4
TEAM MEMBERS
Nguyễn Minh Ánh - 11200471
Mai Nguyễn Minh Hà - 11201170
Phạm Thị Diệu Minh - 11202580
Lê Mỹ Linh - 11202142
Phan Hồng Phú - 11203111
Đỗ Thị Minh Tiến - 11203916
Table of contents
I. Introduction of Credit Rating
II. Credit Rating Agencies in Vietnam
III. Challenges and Oriented development
Table of contents
I. Introduction of Credit Rating
II. Credit Rating Agencies in Vietnam
III. Challenges and Oriented development
I. Introduction of Credit Rating
Definition of Credit Rating
Features and Objectives
of Credit Rating
Types of Credit Rating
Stages in Rating Process
Three biggest Credit Rating
Agencies in the world
5
I. Introduction of Credit Rating
Definition of Credit
Rating
Features and Objectives
of Credit Rating
Types of Credit Rating
Stages in Rating Process
Three biggest Credit Rating
Agencies in the world
6
the ability
Definition of Credit Rating
Credit Rating is an opinion of a particular credit
agency regarding the ability and willingness of an
entity (government, business, or individual) to fulfill
its financial obligations in completeness and within
the established due dates
I. Introduction of Credit Rating
Definition of Credit Rating
Features and Objectives
of Credit Rating
Types of Credit Rating
Stages in Rating Process
Three biggest Credit Rating
Agencies in the world
I. Introduction of Credit Rating
Definition of Credit Rating
Features and Objectives
Types of Credit Rating
of Credit Rating
Stages in Rating Process
Three biggest Credit Rating
Agencies in the world
Features
01
02
Guiding the lay
investors
Chalked out
exclusively as
investment qualities
0
3
0
4
0
5
Assessment of
creditworthine
ss
Simple
gradation
system
Indicating relative
safety of timely
payment of interest
and principal
Features
06
07
Exhibited either in
an alphabetical
manner or an
alphanumerical way
Not an evaluation of the
issuing organization, but a
disclosure reflecting the
opinion on repayment
capacity
1
0
0
8
0
9
Not based
on audit
Flexible in
nature
Based on current
information
I. Introduction of Credit Rating
Definition of Credit Rating
Features and Objectives
Types of Credit Rating
of Credit Rating
Stages in Rating Process
Three biggest Credit Rating
Agencies in the world
12
Objectives
1. Rate the debt
instruments objectively
2. Promote the growth
of the primary &
capital market
3. Ensure absorption
of capital
4. Protect the interests
of investors
5. Ensure optimum
allocation of capita
6. Minimize the cost
of floatation
I. Introduction of Credit Rating
Definition of Credit Rating
Features and Objectives
Types of Credit Rating
of Credit Rating
Stages in Rating Process
Three biggest Credit Rating
Agencies in the world
I. Introduction of Credit Rating
Definition of Credit Rating
Features and Objectives of
Credit Rating
Types of Credit Rating
Stages in Rating Process
Three biggest Credit Rating
Agencies in the world
I. Introduction of Credit Rating
Definition of Credit Rating
Features and Objectives of
Credit Rating
Types of Credit Rating
Stages in Rating Process
Three biggest Credit Rating
Agencies in the world
Types of Credit Rating
Preference Share
03
Rating
Bond/Debenture
01
Rating
02 Equity Rating
Commercial Paper
04
Rating
05 Fixed Deposits Rating 06 Borrowers Rating
07 Individuals Rating
08 Structured Obligation
09 Sovereign Rating
I. Introduction of Credit Rating
Definition of Credit Rating
Features and Objectives of
Credit Rating
Types of Credit Rating
Stages in Rating Process
Three biggest Credit Rating
Agencies in the world
I. Introduction of Credit Rating
Definition of Credit Rating
Features and Objectives of
Credit Rating
Stages in Rating Process
Types of Credit Rating
Three biggest Credit Rating
Agencies in the world
4. Plant Visits and
Meeting with
Management
3. Obtaining
Information
2. Assignment to
Analytical Team
1. Receipt of
the Request
5. Presentation
of Findings
6. Rating Committee
Meeting
7.
Communication
of Decision
8. Dissemination
of the Public
9. Monitoring
for Possible
Change
I. Introduction of Credit Rating
Definition of Credit Rating
Features and Objectives of
Credit Rating
Types of Credit Rating
Stages in Rating Process
Three biggest Credit Rating
Agencies in the world
11/26/2023
21
I. Introduction of Credit Rating
Definition of Credit Rating
Features and Objectives of
Credit Rating
Three biggest Credit
Rating Agencies in the
world
Types of Credit Rating
Stages in Rating Process
22
Three biggest Credit
Rating Agencies in
the world
85%
Contribute
to the overall rating
market
A unique yet similar
rating style to
calculate credit
ratings
Three biggest
Credit Rating
Agencies in the
world
(1) “Investment Grade”,
comprising all ratings from AAA
at the top, down to Baa3/BBB/BBB- at the bottom]
(2) “Non-Investment Grade”
(speculative grade, junk, high yield,
etc.), comprising all ratings from
Ba1/BB+/BB+ through to D (where
default has occurred)
Table of contents
I. Introduction of Credit Rating
II. Credit Rating Agencies in Vietnam
III. Challenges and Oriented development
II. Credit Rating Agencies in Vietnam
1. Regulations related
to Credit Rating
Agencies in Vietnam
2. List of Credit
Rating Agencies in
Vietnam
3. Credit Rating
Agencies & Bond
Market in Vietnam
1. Regulations related to Credit Rating Agencies in Vietnam
Ratings must fully reflect
Article 4 of
the operational status and
Circular
risks of credit institutions
52/2018/TTand comply with the
NHNN
provisions of law
Capital (C), Asset quality
Article 6 of
(A), Executive Management
Circular
(M), Business results (E),
52/2018/TTLiquidity (L), Sensitivity to
NHNN
market risk (S)
Based on the
level of
ratings
achieved
Decree
88/2014
Credit institutions are
classified into Good
(A), Fair (B), Average
(C), Weak (D) or Weak
(E)
CRAs must obtain a
practicing license from
the Ministry of Finance
Article 5 of
Circular
52/2018/TTNHNN
(1)
Compensation
paid to an CRA
must not be
linked to the
rating issued
2)
A CRA must
make public a
list of top paying
customers
(3)
All key contents
of the rating
methodologies
must be
published
(4)
Compliance
with IOSCO’s
Code of
Conducts
(5)
Reporting line
between the
rating committee
and the rating
analysis
II. Credit Rating Agencies in Vietnam
1. Regulations related
to Credit Rating
Agencies in Vietnam
2. List of Credit
Rating Agencies in
Vietnam
3. Credit Rating
Agencies & Bond
Market in Vietnam
2. List of Credit Rating Agencies in Vietnam
FiinRatings
Sai Gon Phat Thinh Ratings
Joint Stock Company
( Saigon Ratings)
FiinRatings
Introduction
Awarded on 20 March 2020 to
Brand and part of FiinGroup,
FiinGroup under the Decree
licensed by the Ministry of
88/2014/ND-CP
dated
26
Finance to operate as a Credit
September
2014
governing
Rating Agency for Vietnam
Credit Rating Agency services
FiinRatings
Service
• Bond Credit Rating
• Credit Evaluation
• Issuer Credit Rating
• Corporate Credit Rating
Focus on credit rating for
issuers and its instruments and
related services for investors
and creditors
Reports
Saigon Ratings
The first credit rating agency (CRA)
in Vietnam, consistent with the
practices and standards of global
CRAs; in compliance with the laws
of Vietnam
Credit Rating Disclosures and Indepth Research Reports relating to
the
reliability
of
financial
obligations
of
Issuers
or
Debt Instruments
Saigon Ratings
Independent
assessments
and
forecasts about the credit risk of an
entity in the economic sectors or a
debt instrument
Saigon Ratings performs Issuer credit
rating, including corporate and
financial institutions; Issue rating
including bond and bank loans
II. Credit Rating Agencies in Vietnam
1. Regulations related
to Credit Rating
Agencies in Vietnam
2. List of Credit
Rating Agencies in
Vietnam
3. Credit Rating
Agencies & Bond
Market in Vietnam
3. Credit Rating Agencies & Bond Market in Vietnam
Vietnam primed
for credit rating
agency to boost
bond market
CRAs & Bond
Market in Vietnam
development is not
adequate
3. Credit Rating Agencies & Bond Market in Vietnam
Vietnam primed for credit rating
agency to boost bond market
(1) Promoting market development
The January 1, 2021 entry
into force of the Law on
Securities that requires some
public bond issues to be rated
(2) Focusing on credit ratings
Draft regulations on the implementation
of the new Law on Securities: total
bonds outstanding > 100% of equity or
total bond issuance value last 12
months > 50 percent of equity must
perform a credit rating
3. Credit Rating Agencies & Bond Market in Vietnam
Vietnam primed for
credit rating agency
to boost bond market
CRAs & Bond Market
in Vietnam development
is not adequate
3. Credit Rating Agencies & Bond Market in Vietnam
CRAs & Bond Market
in Vietnam development
is not adequate
Vietnamese capital market
has grown rapidly in the
past time
The credit rating and the
developing bond market are
not the same.
Vietnam has mainly certified
private placement services
and 95% of services offered
on the bond market are
private issuers.
3. Credit Rating Agencies & Bond Market in Vietnam
CRAs & Bond Market
in Vietnam development
is not adequate
Vietnam has a number
of credit rating agencies
and some more in the “If Vietnam wants to have
coming time.
successful rating agencies,
it needs to learn from the
experience of global rating
agencies”
The most important thing
for corporate bonds is to be
based on credit rating, even
if businesses are rated low,
they still have the right to
issue
Table of contents
I. Introduction of Credit Rating
II. Credit Rating Agencies in Vietnam
III. Challenges and Oriented development
Challenges
Legal documents to serve as a
legal basis for market deployment
Still lack a credit rating
Corporate credit ratings in
Vietnam should be encouraged
or required to be considered
Too few credit rating companies
Legal system needs to be adjusted
in the direction of gradually
improving the regulations
Many
organizations
are
ineligible, weak in capacity and
can create dangerous problems
in the market
Oriented development
(1)
(2)
Improve the quality
of the stock market
Promote the bond
offering to the public in
association with listing
(3)
Boosting bond credit
ratings, creating a
specialized bond market
Resolution 86/NQ-CP
Developing the Government bond
market to become a standard
market in the financial market
Strengthening the inspection and
supervision of the process of issuance,
distribution, custody, investment,
trading of corporate bonds
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