Bangkok--20 Feb--Fitch Ratings
Fitch Ratings (Thailand) has assigned an expected National Long-Term Rating of 'AA(tha)(EXP)' to guaranteed bonds of up to THB3.0bn with maturity of three years to be issued by Center Auto Lease Company Limited (CAL). The Outlook is Stable. The proceeds would be used for general corporate purpose and refinancing.
The final rating is contingent upon receipt of final documents conforming to information already received and the Office of Securities and Exchange Commission's approval of the bond issuance.
KEY RATING DRIVERS
The rating of the guaranteed bond is based entirely on irrevocable and unconditional guarantees provided by CIMB Thai Bank Public Company Limited (CIMBT; AA(tha)/Stable), which is CAL's direct parent. The Stable Outlook on the guaranteed bond is consistent with that of the guarantor, CIMBT.
CIMBT's National Long-Term Rating of 'AA(tha)' is based on Fitch's view of a high probability that the bank would receive extraordinary support from its Malaysia-based parent, CIMB Bank Berhad (CIMB), if required. Fitch sees CIMBT as a strategically important subsidiary of CIMB – based on the latter's near-full ownership (93.7%) of the Thai subsidiary, their name sharing, strong integration and evidence of operational and financial support.
CAL is 99.99% owned by CIMBT. The company's core business is auto hire-purchase (mainly used cars), which is part of CIMBT's consumer banking business. CAL has been benefiting from financial and operational support from its parent, CIMBT, including direct lending and risk management. CAL's assets stood at THB21.1bn at end-2016, or 7.1% of CIMBT's total assets.
For more information on CIMBT, please refer to the credit report dated 31 March 2016 and to the rating action commentaryFitch Upgrades National Ratings of 9 Thai Financial Institutions, dated 2 August 2016, available at www.fitchratings.com.
RATING SENSITIVITIES
The rating of the guaranteed bond would be directly affected by changes in CIMBT's National Long-Term Rating.