Bangkok--9 Apr--Fitch Ratings
Fitch Ratings (Thailand) Limited has assigned ICBC (Thai) Leasing Company Limited’s (ICBCTL; AAA(tha)/Stable) unsecured unsubordinated short-term debenture programme of up to THB20bn a National Short-Term Rating of ‘F1+(tha)’.
The debentures will have a maturity of no more than 270 days and will be issued in several tranches within a year. The proceeds will be used to refinance debt and for funding the expansion of the company’s auto loan portfolio. This short-term debenture programme will replace ICBCTL’s existing THB15bn short-term debenture programme, which will expire in May 2014.
KEY RATING DRIVERS
ICBCTL's programme is rated at the same level as the company's National Short-Term Rating of ‘F1+(tha)’ as issuance under the programme will constitute unsecured unsubordinated short-term obligations of ICBCTL.
The National Ratings of ICBCTL are equalised with those of its parent, Industrial and Commercial Bank of China (Thai) Public Company Limited (ICBCT, AAA(tha)/Stable/F1+(tha)). This reflects its importance as a core subsidiary of the bank - the leasing business has historically been one of the main businesses of ICBCT, and accounted for 38% of the bank’s total loan portfolio at end-2013. The ratings also take into account the full ownership by ICBCT, as well as the close operational and management integration between the parent and subsidiary.
ICBCT’s ratings, in turn, are driven by support from its parent, Industrial and Commercial Bank of China (ICBC, A/Stable/F1).
RATING SENSITIVITIES
Any change in the rating of the programme will be driven by a change in ICBCTL’s National Short-Term Rating, which itself is driven by the rating of ICBCT.
The National Short-Term Rating for ICBCTL is already the highest on the national scale, and hence there is no upside. An upgrade of Thailand’s Long-Term Local-Currency IDR, while ICBC’s ratings remain unchanged, may result in a downgrade of ICBCTL’s National Ratings.
Negative rating action on the IDRs on ICBC could lead to similar action on its subsidiaries’ ratings. A material change in the parent bank’s ability and/or propensity to support its Thai subsidiaries could also have an impact on the subsidiaries’ ratings. For example, a significant reduction in group shareholding in the subsidiaries could result in negative rating action.
ICBCTL is 99.99%-owned by ICBCT, while ICBCT is 97.7%-owned by ICBC.
The other ratings of ICBCTL are unaffected by this action, and are as follows:
National Long-Term Rating at ‘AAA(tha)’; Stable Outlook
National Short-Term Rating at ‘F1+(tha)’
National Long-Term Rating on guaranteed bonds by ICBCT at ‘AAA(tha)’ ; Stable Outlook
National Long-Term Rating on senior unsecured bonds at ‘AAA(tha)’