Fitch revises BIM Land view to negative

Fitch Ratings said it revised the outlook on BIM Land JSC to negative from stable and affirmed the B ratings on the company and its U.S. dollar unsecured unsubordinated notes due May 2026. The recovery rating on the notes is RR4.

“The negative outlook reflects the potential for a sustained weakening in cash collection from property sales and negative free cash flow, which could affect BIML's banking access and pressure liquidity. Regulatory limitations on bank credit growth to the real-estate sector and a crackdown on irregularities surrounding local-currency bond issuances in the last few quarters have weakened consumer and investor sentiment for residential real estate in Vietnam,” Fitch said in a press release.

The agency said it sees attributable contracted sales, excluding minorities' share and land sales, to retreat to about VND 7 trillion in 2023, from an estimated VND 8.7 trillion in 2022. “Rising inflation, interest rates, and weak consumer sentiment are likely to temper housing demand in the next 12-18 months.”

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