Bangkok--21 Jun--Fitch Ratings
Fitch Ratings has today revised the rating Outlooks for Bank of Ayudhya Public Company Limited (BAY) and Easy Buy Public Company Limited (EB) to Negative from Stable. Fitch has affirmed the Long-Term Issuer Default Rating (IDR) and National Long-Term Rating of BAY, as well as the National Long-Term Rating of EB. All other ratings of the issuers are not immediately affected by our action today.
The Outlook revisions follows the similar revision in the Outlooks of their respective parents in the Mitsubishi UFJ Financial Group, Inc. (MUFG), namely the Bank of Tokyo-Mitsubishi UFJ Ltd. (BTMU) and ACOM Co., Ltd. (ACOM), on 16 June 2016 (see ), which came after the Outlook of the Japanese sovereign was revised to Negative from Stable on 13 June 2016.
A full list of rating actions is at the end of this rating action commentary.
KEY RATING DRIVERS
BAY's Long-Term IDR and National Long-Term Rating, and EB's National Long-Term Rating are driven by Fitch's view that these entities are strategically important subsidiaries of their respective parents BTMU and ACOM. This is due to high levels of parent shareholding and control, management integration, and histories of support. Hence Fitch believes there would be a high probability of extraordinary support for the subsidiaries if required.
The Negative Outlooks are consistent with the Negative Outlooks of the parents.
RATING SENSITIVITIES
Any changes in the ratings or credit profile at the parent level would similarly affect the Long-Term IDR and National Long-Term Rating of BAY, and the National Long-Term Rating of EB.
An indication of material weakening in the parents' propensity to provide extraordinary support to their respective subsidiaries could result in downgrade of National Ratings. For example, this could be indicated by a significant reduction in ownership or level of commitment to provide financial support. However, Fitch does not view this as likely in the medium term.
The rating actions are as follows:
BAY:
Long-Term IDR affirmed at 'A-'; Outlook revised to Negative from Stable
National Long-Term Rating affirmed at 'AAA(tha)'; Outlook revised to Negative from Stable
BAY's other ratings listed below are not affected:
Short-Term IDR: 'F2'
Viability Rating: 'bbb'
Support Rating: '1'
National Short-Term Rating: 'F1+(tha)'
National Long-Term Rating on senior unsecured debt: 'AAA(tha)'
National Short-Term Rating on senior unsecured debt: 'F1+(tha)'
National rating on Legacy Basel II subordinated debt: 'AA+(tha)'
EB:
National Long-Term Rating affirmed at 'AA(tha)'; Outlook revised to Negative from Stable
EB's other ratings listed below are not affected:
National Short-Term Rating: 'F1+(tha)'
National Long-Term Rating on senior unsecured bonds: 'AA(tha)'