Fitch Rates ICBCT#s Basel III Tier 2 THB Debentures #AA+(tha)#

Stocks and Financial Services Press Releases Monday January 29, 2018 17:53
Bangkok--29 Jan--Fitch Rates

Fitch Ratings (Thailand) has today assigned a National Long-Term Rating of 'AA+(tha)' to the upcoming Thai baht-denominated Basel III-compliant Tier 2 subordinated unsecured debentures of Industrial and Commercial Bank of China (Thai) Public Company Limited (ICBCT; AAA(tha)/Stable).

The debentures will have a tenor of 10.5 years with a redemption option. The proceeds from the issuance will be used to fund expansion of the bank's loan portfolio and boost its total capital ratio.
KEY RATING DRIVERS
Fitch rates ICBCT's Basel III Tier 2 debentures one notch below ICBCT's National Long-Term Rating of 'AAA(tha)' to reflect their higher loss-severity risk compared to senior unsecured instruments.
Key terms of the debentures include a non-viability trigger, defined as emergency capital assistance from the central bank or any other empowered government agency, with no mandatory full write-down features.

The Tier 2 debentures are more senior to any Additional Tier 1 securities and equity. In the event of a write-down, the Tier 2 debentures would be written down on a pari passu basis with all other Tier 2 loss-absorbing instruments with write-down features.

ICBCT's National Long-Term Rating is underpinned by Fitch's belief of an extremely high probability of extraordinary support, if required, from Industrial and Commercial Bank of China (ICBC; A/Stable), its parent. This is based on ICBCT's important role in supporting ICBC's regional business, ICBC's 97.9% stake in the Thai subsidiary, and brand-sharing.

RATING SENSITIVITIES

The issue rating will be sensitive to any changes in ICBCT's National Long-Term Rating, which itself is driven by the rating of ICBC. Negative rating action on the IDRs on ICBC could lead to similar action on ICBCT's ratings and its issue rating.

Fitch may downgrade ICBCT's National Rating and hence its issue rating if there are signs the parent's propensity to provide support has reduced. For example, this might be evident from ICBC significantly reducing its ownership in or financial commitments to the subsidiary. However, Fitch does not expect this to occur in the near term.


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