Raising Credit Rating Standards: A Boost to Capital Market Transparency

Credit rating activities in Vietnam are entering a new phase, driven by the need to enhance transparency in the capital market. Credit ratings are becoming increasingly important amid economic growth, the objective of upgrading the stock market, and the effort to meet international standards to attract investment into the bond market.

Pham Thi Thanh Tam, Deputy Director of Department of Financial Institutions at Ministry of Finance, said that more than 140 companies, mainly in real estate, energy, securities, and manufacturing, have obtained credit ratings when issuing bonds.

According to Ministry of Finance data, in 2024, VND216.6 trillion worth of bonds were rated, accounting for 46.3% of total issuance. In the first ten months of 2025, this figure reached VND287.4 trillion, 2.1 times higher than the same period the previous year. As of the end of October 2025, the total outstanding debt of bond-issuing organizations with credit ratings reached nearly VND461 trillion, representing 33.7% of the total corporate bond market. This growth reflects the application of mandatory credit rating regulations.

Alongside the development of the capital market and the corporate bond market, credit rating services were introduced in 2014 with the issuance of Government Decree 88/2014/ND-CP regulating credit rating services. A key step to further advance this sector is the adoption of mandatory credit ratings, effective from 2023 for public bond issuance and from 2024 for private placements.

Ministry of Finance recommended that the government propose amendments to Securities Law and Enterprise Law to strengthen the accountability of service providers and raise standards for bonds offered to retail investors, fostering a more transparent market. Notably, the newly issued Decree 245/2025/ND-CP requires companies to obtain a credit rating when issuing bonds to the public.

Le Minh Hung, representative of Department of Securities Offering Regulation under State Securities Commission, said that the legal framework for credit ratings is gradually being completed through documents such as Securities Law 2019, Securities Law Amended 2024, Decree 155/2020/ND-CP, and the Capital Market Development Strategy to 2030.

“From January 1, 2026, professional retail investors may only trade private bonds if the bonds are rated or secured with assets accompanied by a credit rating, to protect investors and minimize market risks,” Hung emphasized.

The standardization of regulations is seen as benefiting both investors and issuing companies. According to Department of Financial Institutions, for investors, credit ratings provide a basis to assess repayment capacity, corporate financial health, and quantify risk.

For issuers, proactively ensuring transparency and obtaining strong credit ratings enhances credibility and reduces fundraising costs. Ba Thi Thu Hue, Head of Commercial at FiinRatings, said that credit ratings help companies access diverse funding sources. Ratings also serve as a basis for negotiating interest rates and terms with financial institutions and support improving credit profiles.

However, to make credit ratings a reliable reference, service quality, independence, and risk management within rating organizations remain challenges. Raman Uberoi, a financial market expert at Crisil Limited, emphasized that credibility and independence are essential and require strict governance and supervision. The primary challenge is managing conflicts of interest through information disclosure and robust internal controls.

Experts from Crisil Limited recommended that Vietnam consider increasing the minimum charter capital for rating agencies, currently VND15 billion, and introduce corporate governance requirements aligned with international standards. These could include requiring at least one-third of board members to be independent, establishing internal audit committees, and appointing dedicated compliance officers.

Ministry of Finance said that it is prioritizing the completion of the legal framework to meet international standards while coordinating with Asian Development Bank (ADB) to provide technical support and training.

Huong Ly (Vietnam Business Forum)