Bangkok--18 Oct--Fitch Ratings
Fitch Ratings (Thailand) has today assigned Bank of Ayudhya Public Company Limited's (BAY; AAA(tha)/Stable) upcoming issue of senior unsecured bonds a National Long-Term Rating of 'AAA(tha)'.
The bonds will have tenor or tenors of two and/or three years, and the total issue size will be up to THB15bn. The issue proceeds will be used for refinancing and/or general corporate purposes.
KEY RATING DRIVERS
The bonds 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 institutional support from its parent, the Bank of Tokyo-Mitsubishi UFJ, Ltd (BTMU; A/Negative), which holds 76.9% of the Thai bank. Fitch views BAY as a strategically important subsidiary of BTMU, with high levels of management control, marketing linkages and operational integration.
RATING SENSITIVITIES
The rating on the bonds is sensitive to any changes in BAY's National Rating. The National Rating on BAY is at the top end of the scale, and no upside is possible.
A downgrade of the Long-Term Issuer Default Rating of BTMU may lead to negative rating actions on BAY, including on the National Long-Term Rating.
BAY's rating could also be negatively impacted if BTMU shows a reduced propensity to support BAY – which may, for example, be indicated by a significant reduction in shareholding or integration. However, Fitch views that this would be unlikely in the medium term.
BAY's other ratings are not affected, and are as follows:
Long-Term Issuer Default Rating: 'A-'; Outlook Negative
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 rating on senior unsecured debt: 'AAA(tha)'
Rating on Legacy Basel II subordinated debt: 'AA+(tha)'