S&P rates Vietnam bond BB-

Standard & Poor’s said it assigned a BB- rating to a proposed benchmark-size dollar-denominated global senior unsecured bond issue by the Socialist Republic of Vietnam.

The bonds mature in November 2024.

The bonds will constitute the direct, unconditional and unsecured general obligations of the sovereign, S&P said, and will rank at least equally with all other present and future unsecured and unsubordinated external debt of Vietnam.

The proceeds of the proposed debt issue are intended partly for general budget financing and partly for a liability management exercise aimed at improving the tenor and cost structure of Vietnam’s external debt, the agency said.

The ratings reflect the country’s low-income economy, underdeveloped monetary framework and capital markets and the risks posed by an evolving policy and institutional setting amid rapid structural transformations in the economy and financial sector, S&P said.

Vietnam’s strengthening external profile with its rising foreign-exchange reserves and modest net narrow external debt supports the rating, the agency said.

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