FiinRatings affirms BB+/ Stable issuer rating of Van Phu - Invest Investment Joint Stock Company (“VPI”)

FiinRatings affirms the long-term Issuer Credit Rating 'BB+' of Van Phu - Invest Investment Joint Stock Company (“VPI” or “the Company”) with the Stable outlook in our latest surveillance.

 

Hanoi, 23 November 2022

FiinRatings affirms the long-term Issuer Credit Rating 'BB+' of Van Phu - Invest Investment Joint Stock Company (“VPI” or “the Company”) with the Stable outlook in our latest surveillance. The affirmation reflects VPI’s strong business position in the residential property segment and high financial leverage level when compared to the industry average. In addition, liquidity is expected to remain at an adequate level in the next 12 months.

The affirmed rating also factors in risks that real estate developers is facing in the current period, including: (i) policy and regulatory changes affecting credit funding for the whole sector, leading to increasing pressure to refinance existing debts; (ii) an increasing interest rate environment having impact on companies’ cost of fund and sale ability and; (iii) inflation is on the rise, resulting in higher cost of construction materials and outsourced services during the implementation of new projects; (iv) major changes to the Government's legal framework related to land prices, property taxes and standardization of real estate brokerage personnel; and a number of other factors that affect the sector in general and VPI in particular in the coming years.

Although VPI’s credit rating is affirmed, we will closely monitor and consider the factors that we believe to have great and sustainable impacts on the Company’s business and financial position, including:

• Progress and cash flows of key projects within the next 12-18 months (including Vlasta Sam Son, The Terra Bac Giang, Vlasta Thuy Nguyen, and Grandeur Palace Pham Hung); cash inflows and outflows from other projects;
• Progress and outcomes of any funding initiatives that have impacts on the Company’s project implementation, cash flow, and financial metrics;
• Changes in macroeconomic environment and in regulatory that will have impacts on the whole residential real estate developer sector and VPI’s response to those changes.

Details of the rating announcement are HERE.

About FiinRatings

FiinRatings, a brand and part of FiinGroup Vietnam, is licensed by the Ministry of Finance to operate as a Credit Rating Agency (“CRA”) for Vietnam on 20 March 2020. With continuous effort to improve expertise and credit rating methodologies, on 24 May 2021, FiinRatings received Technical Assistance from S&P Global Ratings and ADB. On March 10th, 2022, FiinGroup has been officially approved by the Climate Bonds Initiative (CBI) as the first authorized company in Vietnam to verify green bonds issued by Vietnamese businesses when participating in CBI's program.

FiinRatings maintains a strict, independent policy to meet current regulations in providing credit rating services in Vietnam as well as to comply with our conflicts-of-interest policy and to ensure the objectivity and independence in giving opinion on our credit ratings. Visit us for more information.

For more information, visit HERE.

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