FiinRatings Assigns “BB” Credit Rating to Hoa Binh – Xuan Mai Clean Water Co., Ltd. and “AAA” Rating to Green Bond HBXCH2444001 Guaranteed by GuarantCo

Hanoi, December 4, 2024 FiinRatings has officially announced its credit rating results for Hoa Binh – Xuan Mai Clean Water Co., Ltd. (HB-XM) and its bond issuance HBXCH2444001.

FiinRatings has officially announced its credit rating results for Hoa Binh – Xuan Mai Clean Water Co., Ltd. (HB-XM) and its green bond issuance HBXCH2444001. HB-XM has been assigned a long-term issuer credit rating of “BB” with a “Stable” outlook, while the bond has been rated at the highest level of “AAA” due to a comprehensive, unconditional and irrevocable payment guarantee provided by GuarantCo, an entity rated A1 by Moody’s and AA- by Fitch Ratings. 

The “BB” rating with a “Stable” outlook reflects HB-XM’s project development and operational capacity, supported by its parent company AquaOne, which has a track record of developing large-scale water treatment plants in Hanoi and Long An. FiinRatings recognizes the potential of HB-XM’s water treatment plant to meet the clean water demand of Hanoi, leveraging its connection to the western part of the city, modern water extraction and treatment technologies, and the operational expertise of its team, which are expected to optimize costs. However, HB-XM faces risks during the construction and financing phases, given the challenging terrain, land clearance issues, and pipeline installation, which may pose difficulties. Additionally, the pace of fundraising for project development remains a key consideration, as 80% of the project’s total investment is expected to be financed through loans and bonds. 

The HBXCH2444001 bond has been rated “AAA” thanks to the comprehensive, unconditional, and irrevocable payment guarantee provided by GuarantCo, a reputable international guarantor under the Private Infrastructure Development Group (PIDG). The unconditional and irrevocable guarantee elevates the bond’s rating by 11 notches from the issuer's credit rating, underscoring GuarantCo’s strong creditworthiness. This bond represents not only the longest-term issuance by a non-financial corporate in Vietnam but also the second non-financial corporate bond in Vietnam to meet ICMA’s Green Bond Principles, as validated by FiinRatings. This milestone marks a significant advancement in Vietnam’s green bond market. 

FiinRatings evaluates that the project’s robust financial structure and support from GuarantCo provide a solid foundation for HB-XM to complete the project on schedule, enhancing its competitiveness in supplying clean water to Hanoi. Phase 1A of the project is expected to be operational by Q2 2026 with a capacity of 150,000 m³/day. 

FiinRatings’ dual ratings of the issuer HB-XM and the project’s bond issuance, along with its green bond evaluation in line with international standards, contribute to providing independent and transparent information. This enables investors to gain a comprehensive view of the issuer’s financial capabilities and debt service capacity, supports successful corporate fundraising, and fosters sustainable growth and development of Vietnam’s capital markets. 

For further details: 

Credit Rating Report on Hoa Binh – Xuan Mai Clean Water Co., Ltd. [HERE]. 

Credit Rating Report on HB-XM’s HBXCH2444001 Bond Issuance [HERE]. 

 

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