The Fitch Ratings Agency has withdrawn the ratings for Vietnam-based property developer Hoang Anh Gia Lai Joint Stock Co (HAGL).

The US-based credit rating agency has dropped HAGL’s ‘Long-Term Foreign’ and ‘Local Currency Issuer Default Ratings’ of 'B', respectively.

The 'B-' rating on its $75million notes due in 2016 has also been withdrawn, Fitch said.

The ratings remained on Rating Watch Negative (RWN), where they were placed on 31 May 2012, at withdrawal.

Fitch has withdrawn the ratings due to insufficient information following HAGL’s request, the second such demand after the firm asked Standard & Poor's Ratings Services (S&P) to do the same earlier this month.

Fitch will no longer provide ratings or analytical coverage of this issuer, the credit rating agency said.

Behind the scene

With the latest request from HAGL, in the near future, there will be no credit rating organizations presenting any credit evaluations of the real estate giant.

Vo Truong Son, deputy general director of HAGL (coded HAG on Ho Chi Minh Stock Exchange) told Vietstock.vn that since the firm believes there is no need to receive any ratings from such agencies, it has stopped providing additional information to Fitch, and asked Fitch to withdraw all of the credit rating results for HAGL.

As the economic situation in Vietnam, as well as around the world, remains in a difficult place, this is not the appropriate time to raise capital on the international market, Son said. 

As a result, HAGL temporarily has no plans to raise capital on international markets, so it asked the two credit rating agencies, S&P and Fitch, to withdraw all credit ratings.

However, depending on the general development of the market, if the economic situation improves, thus making capital inflows to Vietnam a profitable channel for foreign investors, HAGL will review the possibility of attracting funding on the international market.

At that time, HAGL can still invite S&P and Fitch, or any other organizations, to restart their analysis of HAGL, he added.

S&P earlier this month withdrew all ratings of HAGL following the company's request.

Meanwhile, S&P has reaffirmed its 'B-' long-term corporate credit rating on the property developer with a negative outlook, and its 'B-' long-term ASEAN regional scale rating on the company.

At the same time, it has also reconfirmed the 'B-' rating on the company's senior unsecured notes due in 2016.

The rating agency said its negative outlook on the affirmed rating on HAGL factored in the company's weak liquidity and limited visibility on improving cash flow generation from its real estate sales, iron ore sales, and rubber plantation projects in the next six to 12 months.

With the latest ratings from S&P, HAGL said that the approach of the international credit rating agency is often “too cautious”.

"HAGL and its investors need a credit rating report reflecting more reasonable and more closely observed business and investment activities of the company. Such a credit rating report is too general and, thus, hardly brings any value [to HAGL and its investors]."