Bangkok--9 May--Fitch Ratings
Fitch Ratings - Bangkok/Singapore - 09 May 2017: Fitch Ratings has today revised the rating Outlooks on Bank of Ayudhya Public Company Limited (BAY) and Easy Buy Public Company Limited (EB) to Stable from Negative. At the same time, Fitch has affirmed the Long-Term Issuer Default Rating (IDR) of BAY at 'A-' and the National Long-Term Rating of EB at 'AA+(tha)'. All other ratings of the issuers are not immediately affected by our action today.
The Outlook revisions follows the similar revision in the Outlooks in BAY's parent, Bank of Tokyo-Mitsubishi UFJ Ltd. (BTMU) and EB's parent, ACOM Co., Ltd. (ACOM), on 2 May 2017 (see Fitch Revises Outlooks for Japanese Major Banks to Stable; Upgrades VR of MHFG). The revision of Outlooks came after the affirmation of Japan's sovereign rating at 'A' and revision of the Outlook to Stable from Negative on 27 April 2017 (see Fitch Revises Outlook on Japan to Stable; Affirms at 'A').
A full list of rating actions is at the end of this rating action commentary.
KEY RATING DRIVERS
BAY's Long-Term IDR 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 Stable Outlooks are consistent with the Stable Outlooks of the parents.
RATING SENSITIVITIES
BAY's Long-Term IDR of 'A-' is unlikely to be upgraded as it is currently rated at Thailand's Country Ceiling; however, a downgrade of its parent's Long-Term IDR could result in a similar rating action at BAY.
Any changes in the ratings or credit profile at ACOM would similarly affect 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 the ratings. For example, this could be indicated by a significant reduction in ownership in the subsidiaries or level of commitment to provide financial support. However, Fitch does not view this as likely in the medium term.
The following ratings are not affected by this action and remain unchanged:
BAY
Short-Term IDR: 'F2'
Viability Rating: 'bbb'
Support Rating: '1'
National Long-Term Rating affirmed at 'AAA(tha)'; Stable Outlook
National Short-Term Rating: 'F1+(tha)'
National Long-Term Rating on senior unsecured debt: 'AAA(tha)'
National rating on Legacy Basel II subordinated debt: 'AA+(tha)'
National rating on subordinated debt Basel III Tier 2: 'AA+(tha)'
EB:
National Short-Term Rating: 'F1+(tha)'
National Long-Term Rating on senior unsecured bonds: 'AA+(tha)'