VSC’s A bond rating could be upgraded if its issuer rating is upgraded.
The company’s issuer rating could be upgraded if VSC materially strengthens profitability and diversifies its core businesses, reduces borrowings, and maintains a track record of stronger credit metrics. Upgrade triggers include, EBIT/interest exceeding 4.5x, and CFO/Debt exceeding 25%.
Factors that could lead to a downgrade
VSC’s A bond rating could be downgraded if the collateral value or collateral coverage ratio falls materially and no longer provides meaningful credit enhancement for bondholders; or its issuer rating is downgraded.
The company’s issuer rating could be downgraded if (1) VSC’s profitability weakens because of lower-than-expected throughput or intensified price competition, (2) the company fails to execute its planned equity fundraising and relies more heavily on debt to fund its expansion plan, and/or (3) the company engages in sizable equity investment or trading activity, resulting in greater exposure to market risks. These could materially increase leverage and weaken cash flow coverage metrics. Key downgrade triggers include Debt/EBITDA sustained above 4.4x or CFO/Debt falling below 8.0%.
Rating methodology
Non-Financial Corporates Rating Methodology.
For more detailed information, please refer to our full credit rating methodology at: here
Analyst & Committee
Credit Rating Announcement Number
Vietnam Investors Service and Credit Rating Agency Joint Stock Company
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