Vietnam: 03 things people should know about credit rating grades for enterprises

According to the Decree No. 88/2014/NĐ-CP of Vietnam’s Government, credit rating grades are stipulated as follows:

1. What are “credit rating grades”?

“Credit rating grades” means symbols denoting evaluated grades of the ability of rated organizations to honor their debt obligations.

2. Principles of establishing and using credit rating grades

Credit rating agencies shall establish and consistently use a system of credit rating grades on the following basic principles:

- Credit rating grades must be clear, comprehensible and comparable;

- Credit rating grades spread from the highest to lowest indicating the ability of rated organizations to honor their debt obligations.

3. Disclosure of credit rating grades

Credit rating agencies shall disclose on their websites the symbol and its denotation of each credit rating grade.

Specifically, a credit rating agency shall disclose on its website the following basic information:

- Name of its general director or director;

- Code of conduct prescribed in Article 34 of this Decree;

- Credit rating method prescribed in Article 32 of this Decree;

- Credit rating grade prescribed in Article 33 of this Decree;

- List and capital contribution portions of shareholders or capital-contributing members that hold over 5% of its paid-up charter capital;

- Change in the rate of holding by shareholders or capital-contributing members that hold over 5% of its paid-up charter capital;

- Report on credit rating results prescribed in Article 35 for each credit rating contract.

View more details at the Decree No. 88/2014/NĐ-CP of Vietnam’s Government, effective from November 15, 2014.

Thuy Tram

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