Fitch Rates MBKET#s Thai Baht Subordinated Debentures #AA(tha)#

Stocks and Financial Services Press Releases Thursday January 11, 2018 16:46
Bangkok--11 Jan--Fitch Ratings

Fitch Ratings (Thailand) has today assigned a National Long-Term Rating of 'AA(tha)' to Maybank Kim Eng Securities (Thailand) Public Company Limited's (MBKET; AA+(tha)/Stable) upcoming Thai baht-denominated subordinated debentures. MBKET will issue up to THB1 billion of such debentures, and at issue, the debentures will have a tenor of one year. The firm plans to use the proceeds from the issuance to manage its own funding and liquidity requirements. This is the first rating that Fitch has assigned to a securities firm's subordinated debt in Thailand.

KEY RATING DRIVERS

Fitch has notched MBKET's subordinated debt one level below the anchor rating of 'AA+(tha)'. Subordinated noteholders rank after senior creditors in the priority of claims. The notching reflects the notes' higher loss-severity risks compared with senior unsecured instruments due to the notes' subordination to the latter. The notching also incorporates the subordinated debentures' lack of going-concern loss-absorption and equity conversion. Fitch has assigned an equity credit of 0% to the issue, since the tenor is relatively short and the instrument is not designed to be a permanent part of the company's capital structure.

The agency has used MBKET's National Long-Term Rating of 'AA+(tha)' as the anchor rating for the subordinated instrument. MBKET's National Long-Term Rating is driven by institutional support, since the Thai firm is strategically important to Malayan Banking Berhad (Maybank; A-/Stable). Maybank holds a majority stake in MBKET.

RATING SENSITIVITIES
Changes in MBKET's National Long-Term Rating would have a similar effect on the rating of the subordinated notes.

MBKET's National Long-Term Rating, in turn, is sensitive to changes in the level of institutional support, which reflects Fitch's view on Maybank's capacity and propensity to provide timely extraordinary support to MBKET in times of need.


Latest Press Release

WICE establishes a joint-venture, EUROASIA TOTAL LOGISTICS, with its holding 40% of shares to provide cross-border transport services between China, Hong Kong

WICE establishes a joint-venture, "EUROASIA TOTAL LOGISTICS", with its holding 40% of shares to provide cross-border transport services between China, Hong Kong, and South East Asia with the expectation to achieve the first year's revenue at 200 million...

Photo Release: Krungsri Asset Management wins Best Asset Fund Manager 2018 from Alpha Southeast Asia

Miss Siriporn Sinacharoen, Managing Director, Krungsri Asset Management Company Limited received the Best Asset & Fund Manager Award 2018 from Alpha Southeast Asia magazine at a presentation ceremony on 18 September 2018. Behind-success factors...

Bangkok Bank Public Company Limited Offshore Offering and Issuance of US$1.2 Billion Senior Unsecured Notes under its US$3,000,000,000 Global Medium Term Note Program

Bangkok Bank Public Company Limited (the Bank), acting through its Hong Kong Branch, has offered and issued the following 2 tranches of US$1.2 billion senior and unsecured notes (the Notes) under its US$3,000,000,000 Global Medium Term Note Program to...

KBank-Visa to pilot blockchain based B2B payments

Kasikornbank is the first Thai bank in the pilot designed to simplify the cross-border payments, making it more transparent Visa today announced Kasikornbank is the first Thai financial institution to join the Visa B2B Connect pilot program. Visa B2B...

Photo Release: KBank offers financial facility to a leading plastic packaging company

At KBank Head Office, Mr. Thawee Teerasoontornwong (5th from right), KBank Executive Vice President, Mr. Wiwatana Panithansirikul (5th from left), Chief Executive Officer, and Ms. Suporn Panithansirikul (4th from left), Executive Director of S.P. PetPack...

Related Topics