Bangkok--5 Sep--Fitch Ratings
Fitch Ratings has affirmed the National Long-Term Rating on Bangkok Commercial Asset Management Public Company Limited (BAM) at 'AA-(tha)', with a Negative Outlook. A full list of rating actions is at the end of this commentary.
KEY RATING DRIVERS
BAM's ratings are driven by sovereign support considerations. BAM is wholly owned by the Financial Institutions Development Fund, which is a unit of Thailand's central bank, the Bank of Thailand (BOT). BAM was established in 1998 to manage distressed-assets arising from a financial crisis. BAM has been consistently profitable and plays an important role in the Thai financial system as the country's largest distressed-asset manager. State support is evident through regulatory advantages; for example, commercial banks lending to BAM can count those loans as liquid assets.
The Negative Outlook reflects the BOT's ongoing plans to partially privatise BAM through a stock-exchange listing. While details on the share sale are not yet finalised and the timeline remains unclear, the plans suggest that the state does not view BAM as a long-term core holding. It is also uncertain whether BAM's regulatory advantages will remain after privatisation.
RATING SENSITIVITIES
A reversal of plans to partially privatise BAM and signs of a long-term commitment by the state to maintain BAM's shareholdings and regulatory advantages would lead to a revision of the Outlook to Stable and a possible re-assessment of BAM's National Long-Term Rating.
Changes in BAM's shareholding structure would be likely to negatively affect its ratings. A reduction in the state shareholding to below 50% and a removal of BAM's regulatory advantages would be likely to result in a multiple-notch downgrade. The final rating would also depend on BAM's leverage and overall financial profile.
The rating actions are as follows:
Bangkok Commercial Asset Management Public Company Limited
National Long-Term Rating affirmed at 'AA-(tha)'; Outlook Negative
National Short-Term Rating affirmed at 'F1+(tha)'
National Long-Term Rating on senior unsecured bonds affirmed at 'AA-(tha)'