03 levels of risk for loans provided to foreign governments

According to Article 25 of Decree No. 118/2026/ND-CP, the levels of risk are classified as follows:

Loans provided to foreign governments are determined to involve temporary risk in cases where overdue debts range from 01 to 03 repayment periods but do not exceed 18 months.

Loans provided to foreign governments are determined to involve serious risk in cases where overdue debts range from 04 to 06 repayment periods but do not exceed 36 months.

Loans provided to foreign governments are determined to involve risk leading to insolvency in cases where overdue debts exceed 06 repayment periods.

In addition, according to Article 26 of Decree No. 118/2026/ND-CP, the forms of risk handling are prescribed as follows:

Depending on the level of risk, the forms of risk handling include:

• Debt extension: applicable to loans provided to foreign governments involving temporary risk as prescribed in Clause 1, Article 25 of Decree No. 118/2026/ND-CP.
• Debt freezing: applicable to loans provided to foreign governments involving serious risk.
• Other special measures: applicable to loans provided to foreign governments involving risk leading to insolvency as prescribed in Clause 3, Article 25 of Decree No. 118/2026/ND-CP. Among special risk-handling measures, priority shall be given to debt restructuring measures aimed at preserving the value of the loan capital, including forms negotiated and agreed with the borrower such as converting debt into equity contributions in infrastructure projects, or converting debt into rights to exploit natural resources or commercial rights of Vietnamese enterprises in the borrowing country.