Bangkok--11 Sep--Fitch Ratings
Fitch Ratings (Thailand) has assigned Bank of Ayudhya Public Company Limited's (BAY; AAA(tha)/Stable) upcoming issue of senior unsecured bonds National Long-Term Ratings of 'AAA(tha)'.
The bonds will have maturities of two and/or three years, and the total issue size will be up to THB15bn. The proceeds of the issue will be used for refinancing and/or general corporate purposes.
KEY RATING DRIVERS
The notes are rated at the same level as BAY's National Long-Term Rating, as they represent unsubordinated and unsecured obligations of the bank.
BAY's National Long-Term Rating is driven by Fitch's view that it is a strategically important subsidiary of the Bank of Tokyo-Mitsubishi UFJ, Ltd (BTMU; A/Stable), as it is a key platform for BTMU's regional ambitions. BTMU holds 76.9% of BAY, following the integration of BAY with BTMU's Bangkok branch in January 2015, which solidified its status as the fifth-largest commercial bank in Thailand by loans and deposits.
RATING SENSITIVITIES
A downgrade in BTMU's Long-Term Issuer Default Rating could lead to negative rating action on BAY, including on the National Long-Term Ratings.
BAY's ratings could also be negatively impacted if BTMU displays a reduced propensity to support BAY, which, for example, might be seen through a material reduction in shareholding or a reversal of recent integration measures. However, in Fitch's view, such actions are unlikely, as reflected in the Stable Outlook on the ratings.
BAY's ratings are as follows:
Long-Term Issuer Default Rating: 'A-'; Outlook Stable
Short-Term Issuer Default Rating: 'F2'
Viability Rating: 'bbb'
Support Rating: '1'
National Long-Term Rating: 'AAA(tha)'; Outlook Stable
National Short-Term Rating: 'F1+(tha)'
National long-term senior unsecured debt: 'AAA(tha)'
National short-term senior unsecured debt: 'F1+(tha)'
Legacy Basel II subordinated debt: 'AA+(tha)'