Fitch assigns Viet Nam 's EVNNPT first-time 'BB' rating; outlook stable
Fitch assigns Viet Nam 's EVNNPT first-time 'BB' rating; outlook stable
Fitch Ratings on Wednesday assigned Viet Nam’s National Power Transmission Corporation (EVNNPT) a long-term foreign-currency issuer default rating (IDR) of 'BB' with a stable outlook for the first time.
The agency has also assigned EVNNPT a senior unsecured rating of 'BB'.
EVNNPT's ratings are based on the consolidated profile of Viet Nam Electricity (EVN, BB/Stable, standalone credit profile: BB), which owns 100 per cent of EVNNPT, in line with Fitch's parent and subsidiary rating linkage criteria. The consolidated rating approach is driven by strong linkages between EVNNPT and its parent company.
Fitch assesses EVNNPT's standalone credit profile at 'BB+', stronger than EVN's IDR. EVNNPT's standalone credit profile is supported by its monopoly of Viet Nam's electricity transmission sector, pooled counterparty risk and strong receivable position. The company relies on multiple counterparties, which are the five distribution companies under EVN, and enjoys strong receivables.
EVNNPT's financial profile is stronger than that commensurate for its credit assessment. However, an upgrade of EVNNPT's standalone credit profile is contingent upon the consistent application of electricity regulatory reforms, including timely changes to tariffs that reflect cost changes, and an improvement in EVN's credit profile.
EVN's ratings reflect its standalone credit profile, which is at the same level as that of Viet Nam's sovereign rating (BB/Stable). EVN's standalone credit profile benefits from its position as the owner and operator of Viet Nam's electricity transmission network through EVNNPT and its distribution network, and the company's near 61 per cent share of the country's power generation capacity. Under Fitch's Government-Related Entities Rating Criteria, EVN's ratings will be equalised with that of the sovereign should its standalone credit profile weaken, provided linkages remain intact.
