Bangkok--27 Jan--Fitch Ratings
Fitch Ratings (Thailand) Limited has affirmed Bangkok Mass Transit System Public Company Limited’s (BTSC) two tranches of debentures that are unconditionally and irrevocably guaranteed by Bank of Ayudhya Public Company Limited (BAY; AAA(tha)/Stable) at ‘AAA(tha)’. The Outlook is Stable. The rated debentures are the THB1.5bn debenture due August 2015 and THB1.3bn debenture due August 2016.
Key Rating Drivers
Guarantee from BAY: The ratings of the debentures are fully based on an unconditional and irrevocable guarantee of principal and interest of the debentures provided by BAY. As a result, the debentures are rated at the same level as the guarantor, BAY.
Mass Transit Operator: Established in 1992, BTSC is the operator of BTS Skytrain - an elevated mass rapid rail transit system in Bangkok. After the company sold the net farebox revenue of BTS Skytrain to BTS Rail Mass Transit Growth Infrastructure Fund in April 2013, BTSC now relies mainly on the operation and maintenance (O&M) service revenue. Previously, BTSC’s revenue was mainly sourced from the fare collection of the BTS Skytrain.
BTSC also receives revenue from advertising sales through its subsidiary VGI Global Media Public Company Limited, leasing of commercial space at the BTS Skytrain stations (except extension routes), and interest income from excess cash. The company has also been awarded the O&M contracts for BTS extension routes and Bangkok Bus Rapid Transit system.
RATING SENSITIVITIES
Negative: Future developments that may, individually or collectively, lead to negative rating
action include:
- negative rating action on BAY
The debentures are rated at the highest level on Fitch’s national rating scale established for Thailand, leaving no further room for positive rating action.
For the ratings of BAY, the following sensitivities were outlined by Fitch in its Rating Action Commentary of 12 February 2014.
Upgrades of the National Long-Term Rating of BAY is unlikely given BAY's National Long-Term Rating is the highest on the national scale. A negative rating action on the Long-Term Issuer Default Rating (IDR) of BAY’s institutional shareholder, Bank of Tokyo-Mitsubishi UFJ, Ltd. (BTMU), would lead to similar rating action on BAY's IDRs, Support Rating and National Long-Term Rating. A negative rating action could occur if there is a material reduction in BTMU's shareholding in or in its propensity to provide support to BAY.