Bangkok--18 Apr--Fitch Ratings
Fitch Ratings (Thailand) Limited has assigned ICBC (Thai) Leasing Company Limited's (ICBCTL: AAA(tha)/Stable/F1+(tha)) senior unsecured medium-term note (MTN) programme a National Long-Term Rating of 'AAA(tha)' and a National Short-Term Rating of 'F1+(tha)'. The programme has a maximum issuance size of THB30 billion, and allows revolving issuances from 30 April 2018 to 29 April 2020.
At the same time, Fitch has assigned a National Long-Term Rating of 'AAA(tha)' to ICBCTL's upcoming long-term senior unsecured notes (No.1/2018) of up to THB5 billion under the programme. The notes will be offered in tranches. The proceeds will be used for either refinancing or funding ICBCTL's general operations or both.
The ratings of the programme apply only to senior unsecured issues under the programme. The programme does not permit the issuance of subordinate notes. There is no assurance that notes issued in the future under the programme will be assigned a rating.
KEY RATING DRIVERS
ICBCTL's MTN programme and senior notes are rated at the same level as the company's National Long-Term Rating of 'AAA(tha)' and National Short-Term Rating of 'F1+(tha)'. This is in line with Fitch's criteria, as the senior notes represent unsecured and unsubordinated obligations of the issuer.
The National Ratings of ICBCTL are the same as those of its parent, Industrial and Commercial Bank of China (Thai) Public Company Limited (ICBCT; AAA(tha)/Stable/F1+(tha)). This reflects Fitch's view of an extremely high probability that ICBCT would extend extraordinary support to ICBCTL, if needed.
Fitch views ICBCTL as a core subsidiary of the bank given ICBCTL's important role in supporting the bank's retail banking business. ICBCTL accounted for around 26% of ICBCT's consolidated loans at end-2017 and 30% of consolidated revenue in 2017. ICBCTL is also closely integrated with its parent and shares its parent's brand, while the parent fully owns ICBCTL and has provided ordinary financial support to ICBCTL.
RATING SENSITIVITIES
The programme and issue ratings are sensitive to changes in ICBCTL's National Long-Term Rating and National Short-Term Rating.
Any changes in the perceived propensity of ICBCT to support ICBCTL could lead to rating shifts on the National Ratings on both ICBCTL and its senior debt. This may occur if ICBCT reduces its ownership, withdraws its financial commitment, or undertakes actions indicating a materially lower propensity to provide support. However, Fitch believes these are unlikely to occur in the near term.
For more details on the rating drivers and sensitivities for ICBCTL and ICBCT, please see the rating action commentary Fitch Affirms 6 Thai Subsidiaries of North Asian Financial Institutions, dated 21 September 2017.