The debentures will have a maturity of 11 months and 30 days. The company plans to use the proceeds to refinance outstanding subordinated debentures.
KEY RATING DRIVERS
KTBSTSEC's subordinated debentures are rated one notch below its National Long-Term Rating to reflect the subordinated debentures' higher loss-severity risk relative to senior unsecured instruments, as per Fitch's Corporate Hybrids Treatment and Notching Criteria.
This arises from the debentures' subordinated status, as subordinated noteholders rank after senior creditors in the priority of claims. Additional notching has not been applied due to the lack of going-concern loss-absorption and equity-conversion features. Fitch has not assigned equity credit to the issue as the instrument is not designed to be a permanent part of the company's capital structure.
For further details on KTBSTSEC's key rating drivers and rating sensitivities, please see our latest commentary Fitch Upgrades KTBST Securities to 'BB+(tha)'; Outlook Stable, published 10 January 2022.
Factors that could, individually or collectively, lead to negative rating action/downgrade:
The National Long-Term Rating on the subordinated debentures is sensitive to changes in KTBSTSEC's National Long-Term Rating, which is the anchor rating. A downgrade of KTBSTSEC's National Long-Term Rating would result in a downgrade of the subordinated debenture rating.
Factors that could, individually or collectively, lead to positive rating action/upgrade:
An upgrade of KTBSTSEC's National Long-Term Rating is likely to lead to similar action on the rating of the subordinated debentures.
DATE OF RELEVANT COMMITTEE
01 March 2022
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.
Additional information is available on www.fitchratings.com
Source: Fitch Ratings