Fitch Rates Bank of Ayudhya#s Basel III Tier 2 THB Notes at #AA+(tha)#

Stocks and Financial Services Press Releases Wednesday October 25, 2017 11:50
Bangkok--25 Oct--Fitch Ratings

Fitch Ratings (Thailand) has today assigned Bank of Ayudhya Public Company Limited's (BAY; AAA(tha)/Stable) upcoming issue of Thai baht-denominated Basel III-compliant Tier 2 subordinated unsecured notes a National Long-Term Rating of 'AA+(tha)'. The debentures will have a tenor of 10 years, with an option to redeem after five years as well as on subsequent interest payment dates.

KEY RATING DRIVERS

The subordinated notes are rated one notch below the bank's National Long-Term Rating to reflect their higher loss-severity risk compared with senior unsecured instruments. Key terms of the notes include a non-viability trigger for loss-absorption (defined as emergency capital assistance from an empowered government agency), with a partial rather than a mandatory full writedown. The notes do not have going-concern loss-absorption features, and hence there is no additional notching for non-performance risk.

BAY's National Long-Term Rating, which is used as the anchor rating, reflects Fitch's belief that the bank is a strategically important subsidiary of the Bank of Tokyo-Mitsubishi UFJ, Ltd. (BTMU; A/Stable/a). BTMU holds 76.9% of BAY and the Thai bank plays a key role in the parent's strategy for south-east Asia, with high levels of integration and marketing linkages.

RATING SENSITIVITIES

Any change in the National Ratings of BAY would have a similar effect on the ratings of the notes. No upside is possible to the National Ratings as they are already at the top end of the scale. However, a downgrade of the Long-Term Issuer Default Rating of BTMU could lead to negative rating action on BAY, including on the National Long-Term Rating.

BAY's ratings could also be negatively affected if BTMU shows a reduced propensity to support BAY - which may, for example, be seen via a significantly reduced shareholding or reduction in its strategic role. However, Fitch believes that this is unlikely to occur in the medium term.


Latest Press Release

USD120,000 at stake in CIMBs 3D Conquest to unearth ASEANs top #digital talents Competition sets path for nurturing crucial skills in data science, FinTech and coding among tertiary students

CIMB Group Holdings Berhad ("the Group" or "CIMB") has launched the CIMB 3D Conquest, a competition that aims to identify and attract ASEAN's top creative, young digital talent with an agile and entrepreneurial mindset. Open to all tertiary students, the...

Allianz to become Worldwide Olympic Insurance Partner

The International Olympic Committee (IOC) and Allianz today announced that the insurer will join the "Worldwide Olympic Partner" (TOP) Programme in 2021. Through this sponsorship agreement, Allianz will work with the IOC to provide innovative and...

BYFX Global Co., Limited Announces Business Launch

BYFX Global Co., Limited (BYFX Global) today announced the launch of its retail and institutional business -- offering clients around the globe top-tier liquidity and online OTC trading for Spot FX and Spot Bullion[1]. Striving towards financial...

2018 Robot World to Suggest Direction for the Fourth Industrial Revolution

Showcasing the latest robot technologies from around the world, the 2018 Robot World will be held at KINTEX, Korea from October 10-13, 2018. The Robot World (eng.robotworld.or.kr/wp), celebrating its 13th anniversary this year, consists of four main...

ชวนผู้ประกอบการเรียนรู้เส้นทางความสำเร็จของสตาร์ทอัพแอปพลิเคชัน เคลมดิ อังคาร 25 ก.ย. นี้

ตลาดหลักทรัพย์ฯ ขอเชิญผู้ประกอบการ Social Enterprise (SE) SMEs และ Startup ร่วมอบรมครั้งพิเศษในโครงการ SET Social Impact Gym หัวข้อ "Fintech vs Social Startup... Lesson Learned..." พบกับสตาร์ทอัพเจ้าของแอปพลิเคชัน "เคลมดิ" (Claim Di)...

Related Topics