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

Photo Release: KBank teams up with PTTOR to offer first KBank Service at Cafe Amazon, PTT Service Station (Ekamai-Ramintra)

Ms. Jiraporn Khaosawas (1st from left), Chief Executive Officer and Managing Director of PTT Oil and Retail Business PCL. (PTTOR), and Mr. Patchara Samalapa, KBank President, recently introduced "KBank Service" or deposit service at Cafe Amazon, PTT...

SHREIT announces distribution for unitholders of 0.2561 baht per unit All three existing hotels continue to generate excellent revenues in past three months Results from first 10 months of 2018 yield total distribution of 0.5997 baht per unit

Strategic Hospitality Extendable Freehold and Leasehold Real Estate Investment Trust (SHREIT) on 19 November 2018 announced distribution payment for the past four months (1 August - 31 October 2018) to unitholders at the rate of 0.2561 baht per unit. And...

KTC joins forces with Bangkok Airways Airline in launching seven brand-new KTC Bangkok Airways credit cards beyond the power of boutique, all-in-one cards.

KTC jointly with Bangkok Airways, celebrate their 13th partnership anniversary and Bangkok Airways' 50th anniversary, transforming seven KTC – Bangkok Airways credit cards to cover all card alliance networks including MasterCard, VISA and JCB,...

SEC Dates CAZ Filing Plans to Sell 80 Million of IPO Shares To Increase Working Capital and Serve More Future Works

The Securities and Exchange Commission Thailand (SEC) dated the filing of CAZ (Thailand) Public Company Limited or "CAZ" for listing in the Market for Alternative Investment (MAI). The Company plans to sell 80 million of initial public offering (IPO)...

UnionPay Launches UnionPay Celebrating You Campaign Offering exclusive privileges that let customers save more this festive season

Photo Caption – Mr. Pingfu Zheng (third from left), Thailand Country Manager, Union Pay International and Mr. Thanakorn Puriwekin (second from left), Director and Chief Films Officer, Major Cineplex Group, attended the launch event for UnionPay...

Related Topics