Fitch upgrades ratings of Petrovietnam, Vietnam Electricty, subsidiaries to ‘BB+’

Fitch Ratings has upgraded the Long-Term Issuer Default Ratings (IDRs) of state-owned oil-gas group Petrovietnam, state utility Vietnam Electricity (EVN), and subsidiaries of the two power giants to “BB+” with a “Stable” outlook.

In a Wednesday release, Fitch said the latest action follows the upgrade of Vietnam’s long-term foreign-currency IDR to “BB+” last week.

EVN’s rating is equalized with Vietnam’s latest sovereign rating, reflecting a strong likelihood of support by the state. EVN’s standalone credit profile (SCP) is assessed as “bb”, Fitch added.

The six EVN subsidiaries with updated ratings are EVN National Power Transmission Corporation (EVNNPT), EVN Southern Power Corporation (EVNSPC), Hanoi Power Corporation (EVNHANOI), Ho Chi Minh City Power Corporation (EVNHCMC), EVN Northern Power Corporation (EVNNPC), and EVN Central Power Corporation (EVNCPC).

EVNNPT’s SCP is “bb+” while that of five power corporations EVNHANOI, EVNHCMC, EVNSPC, EVNNPC, EVNCPC is “bb,” Fitch noted.

Petrovietnam's rating reflects its SCP of 'bb+', the same level as the IDR of its parent, the Vietnam sovereign, Fitch highlighted. Three PVN subsidiaries with new ratings are PetroVietnam Power Corporation (PV Power), PetroVietnam Gas (PV Gas) and Binh Son Refining and Petrochemical (BSR).

Fitch revised PV Power's SCP to 'bb+' from 'bb' in line with its key counterpart, EVN. SCP was previously constrained by PVN's IDR, even though PV Power's financial profile is stronger than its SCP assessment indicates, Fitch stressed.

PV Gas' rating reflects its SCP of 'bb+', which is at the same level as that of the parent, PVN. BSR's rating is equalised with that of its parent, PVN, based on Fitch's rating criteria.

On December 8, Fitch Ratings upgraded Vietnam's Long-Term Foreign-Currency Issuer Default Rating (IDR) to “BB+”, from “BB” with a stable outlook. The upgrade reflects Vietnam's favorable medium-term growth outlook, underpinned by robust foreign direct investment (FDI) inflows, which Fitch Ratings expects will continue to drive sustained improvements in its structural credit metrics.