Bangkok--15 Sep--Fitch Ratings
Fitch Ratings (Thailand) Limited has assigned ICBC (Thai) Leasing Company Limited’s (ICBCTL; AAA(tha)/Stable) issue of up to THB2.5bn of guaranteed bonds an Expected National Long-Term Rating of ‘AAA(tha)(exp)’. The Outlook is Stable.
ICBCTL has an option to increase the issue size to up to THB3.0bn. The bonds will be guaranteed by Industrial and Commercial Bank of China (Thai) Public Company Limited (ICBCT; AAA(tha)/Stable), which holds a 99.99% stake in the company. ICBCTL will use the proceeds to refinance debt and to expand its loan portfolio.
The final ratings are contingent upon receipt of final documents conforming to information already received.
KEY RATING DRIVERS
The issue ratings are based entirely on an unconditional and irrevocable guarantee provided by ICBCT. The bank’s national ratings are underpinned by Fitch’s belief of an extremely high probability of extraordinary support, if required, from Industrial and Commercial Bank of China (ICBC; A/Stable), its parent.
Fitch considers ICBCT to be strategically important to the parent due to its important role in allowing the group to support the rapid growth in trade and investment between Thailand and China, the high level of operational integration with the group, a past history of ordinary financial support and near-full ownership (ICBC holds a 97.7% stake in ICBCT).
RATING SENSITIVITIES
The ratings of the guaranteed bond would be affected by any negative ratings action at ICBCT. For example, this could be caused by a change in ICBC’s ability to support ICBCT, which could be evidenced by a ratings downgrade at ICBC, or by a shift in ICBC’s propensity to support ICBCT, which could arise from a significant reduction in the parent’s shareholding. However, Fitch believes that these scenarios are unlikely to occur in the near term.
ICBCT’s National Long-Term Rating is the highest on the national scale and hence no upside is possible. An upgrade of Thailand’s Long-Term Local-Currency IDR, while ICBC’s ratings remain unchanged, may result in a downgrade of ICBCT’s National Ratings.
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 outstanding bonds guaranteed by ICBCT at ‘AAA(tha)’ ; Stable Outlook
National Long-Term Rating on senior unsecured bonds at ‘AAA(tha)’
National Short-Term unsecured unsubordinated debenture programme at ‘F1+(tha)’