KEY RATING DRIVERS
The bonds are rated at the same level as UOBT's National Long-Term Rating as they represent the bank's unsubordinated and unsecured obligations.
UOBT's ratings are driven by Fitch's view that the bank is a strategically important subsidiary of Singapore-based United Overseas Bank Limited (UOB; AA-/Negative). UOBT provides the group with a presence in Thailand, the second-largest economy in south-east Asia. The parent owns 99.7% of UOBT, with significant levels of management control and operational integration between the two entities.
For further details on UOBT's key rating drivers and sensitivities, please refer to Fitch Affirms UOB Thai at 'A-' and 'AAA(tha)'; Outlook Stable, published 7 May 2021.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to negative rating action/downgrade:
A downgrade of the bank's National Long-Term Rating would lead to similar action on the senior debt instruments.
There may be negative rating action on the bank's ratings if there were very substantial changes to UOB's ability to support UOBT. For example, the parent's international scale rating would have to be downgraded by multiple notches before there would be any impact on UOBT's National Long-Term Rating.
There may also be negative rating action if the parent's propensity to support UOBT declines, including a drop in UOB's shareholding to below 75%, combined with substantially reduced management control and integration. However, Fitch does not expect these changes in support propensity to occur in the medium term.
Factors that could, individually or collectively, lead to positive rating action/upgrade:
There is no upside to the rating, which is at the top end of the scale.
DATE OF RELEVANT COMMITTEE
06 May 2021
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING
The principal sources of information used in the analysis are described in the Applicable Criteria.
PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS
UOBT's IDRs, Support Rating and National Ratings are driven by the ratings of its parent United Overseas Bank Limited of Singapore.
Additional information is available on www.fitchratings.com
Source: Fitch Ratings