Vietnam Sees First FDI Enterprises Issue Local-Currency Green Bonds

Verdant Vietnam Bravo and Verdant Vietnam Crystal, two subsidiaries of renewable energy developer Verdant Energy, have successfully issued two tranches of Vietnamese dong (VND)-denominated green bond with a total value of VND 792 billion (approximately USD 30 million) in Vietnam's domestic capital market.

This is the first local-currency green bond transaction by FDI enterprises in Vietnam to receive both an independent credit rating from FiinRatings and an "Aligned" Second Party Opinion under the Green Bond Principles (GBP) of the International Capital Market Association (ICMA), marking an important milestone in mobilizing long-term green capital through Vietnam's capital market.

Key Transaction Details

• Issue size: VND 792 billion (approximately USD 30 million), denominated in Vietnamese dong (VND).
• Tenor: 15 years, with a fixed nominal coupon rate of 6.95% per annum.
• Guarantee: Unconditional and irrevocable full payment guarantee provided by GuarantCo.
• Use of proceeds: Financing for a 58 MW rooftop solar project portfolio in Vietnam.
• Investors: Domestic insurance funds were the primary investors.

Role of FiinRatings

FiinRatings played a central role in the transaction structure through independent assessments, helping enhance market transparency, strengthen investor confidence, and support the successful mobilization of long-term funding in Vietnam's domestic capital market at a competitive cost.

• Credit Ratings: FiinRatings assigned 'AAA' Bond Credit Ratings to the VEB12601 and VEV12601 bond tranches issued in the initial issuance, totalling VND 390 billion. The bond ratings represent a significant uplift from the issuers' 'BB+' Issuer Credit Ratings, reflecting the effectiveness of the credit enhancement mechanism provided through GuarantCo's guarantee, which was independently assessed and confirmed by FiinRatings.
• Green Bond Assessment (Second Party Opinion) under the ICMA Green Bond Principles: FiinRatings affirmed that both bond tranches received a pre-issuance "Aligned" Second Party Opinion under the ICMA Green Bond Principles, providing investors with an independent assessment of the bonds' green credentials.
• Market Data Sharing: FiinRatings provided sector insights and bond pricing benchmarks to support underwriters, issuers and investors during the transaction process.

Significance for Vietnam's Capital Market

• This is the first bond transaction by FDI enterprises in Vietnam to carry both domestic credit rating and an "Aligned" Second Party Opinion under the ICMA Green Bond Principles, setting a new benchmark for Vietnam's domestic green corporate bond market.
• The successful issuance of 15-year fixed-rate bonds, despite continued volatility in domestic and global interest rate environments, underscores the increasingly important role of third-party credit enhancement mechanisms, together with the transparency reinforced through independent credit ratings and green bond assessments.
• The transaction demonstrates that foreign-invested enterprises can effectively access Vietnam's capital market to diversify long-term funding sources alongside equity financing, bank credit, and international debt capital markets.
• The proactive use of Vietnam's domestic capital market by FDI enterprises reflects confidence among international investors in the long-term potential of Vietnam's capital market. The transaction also aligns with the Government's policy of attracting high-quality FDI, developing the capital market, and advancing the green transition under Resolution No. 10-NQ/TW, while supporting the Ministry of Finance and the State Securities Commission's initiatives to expand high-quality investment products and broaden the institutional investor base.

Mr. Sivaramakrishnan Sreedharan, Chief Investment Officer of Verdant Energy, said: "The success of these bond transactions in Vietnam's domestic market marks an important milestone in Verdant Energy’s investment and renewable energy development strategy. These green bond issuances reflect our confidence not only in the renewable energy sector, but also in Vietnam's broader business environment and the long-term potential of its capital market. We highly value FiinRatings' role through its independent credit ratings, ICMA-aligned green bond assessments, and in-depth industry and capital market analysis, all of which contributed significantly to the successful execution of these transactions."

Mr. Nguyen Quang Thuan, Chief Executive Officer of FiinRatings, commented: "This transaction demonstrates that when the transparency is effectively enhanced with credit ratings, sustainable finance assessments, Vietnam's domestic capital market is capable of meeting the long-term funding needs of enterprises, including foreign-invested companies. We expect this transaction to serve as a catalyst for more enterprises to access domestic corporate bond market, thereby expanding the supply of high-quality investment products to the market and supporting the sustainable development of Vietnam's capital market."

References:

1/ Verdant Energy Announcement: Verdant Energy closes Vietnam's first C&I solar green bond — Renewable Energy Development Company | Verdant Energy

2/ FiinRatings Second Party Opinion Report: THIS LINK

3/ FiinRatings Bond Credit Rating Reports:

• VEB12601 Bond Issued by Verdant Vietnam Bravo
• VEV12601 Bond Issued by Verdant Vietnam Crystal

4/ FiinRatings Issuer Credit Rating Reports:

• Verdant Vietnam Bravo Issuer Credit Rating Announcement
• Verdant Vietnam Crystal Issuer Credit Rating Announcement

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