Fitch Rates KASIKORNBANK's Proposed Basel III Tier 2 USD Notes 'BBB(EXP)'

Friday 20 September 2019 16:22
Fitch Ratings has assigned KASIKORNBANK Public Company Limited's (KBank; BBB+/Stable/bbb+) proposed US dollar Basel III-compliant Tier 2 subordinated notes an expected rating of 'BBB(EXP)'. The proposed notes will be issued under KBank's euro medium-term note programme.

The final rating is subject to the receipt of final documentation conforming to information already received.


The proposed Tier 2 notes are rated one notch below the anchor rating, which is KBank's Viability Rating of 'bbb+'. This reflects the proposed notes' subordinated status and higher loss-severity risks relative to senior unsecured instruments. The non-viability trigger is defined as emergency capital assistance from the central bank or any other empowered government agency, in line with other Basel III Tier 2 notes issued by Thai banks. There is no mandatory full write-down at non-viability.

No additional notching has been applied, as the proposed notes do not have a going-concern loss-absorption feature. The proposed notes are senior to KBank's equity securities, including preference shares and Tier 1 capital securities, and will rank pari passu with all of KBank's subordinated debt that qualifies as Tier 2 capital.

KBank's Viability Rating takes into consideration its strong domestic franchise as one of Thailand's largest banks and its leadership in SME lending. The bank's transactional and digital banking platform serves its cross-selling strategy and supports its stable and low-cost funding profile.

For full details on KBank's key rating drivers and sensitivities see, Fitch Affirms KASIKORNBANK at 'BBB+', Kasikorn Securities at 'AA(tha)', published 12 April 2019, and our credit report, KASIKORNBANK Public Company Limited, published 17 July 2019; both available at


Any change to KBank's Viability Rating would have a similar effect on the proposed notes' ratings, as the Viability Rating is the anchor rating from which the proposed notes are notched down.


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