Bangkok--6 Jun--Fitch Ratings
Fitch Ratings (Thailand) has 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 proposed bonds will have a tenor of up to three years and will be sized up to THB15 billion. Proceeds will be used for refinancing and general corporate purposes.
KEY RATING DRIVERS
The bonds are rated at the same level as BAY's National Long-Term Rating, as they represent its unsubordinated and unsecured obligations.
BAY's National Long-Term Rating reflects Fitch's view that the bank is a strategically important subsidiary of MUFG Bank, Ltd. (A/Stable/a). MUFG Bank holds 76.9% of BAY, with a high level of management control and operational integration. BAY plays a key role in implementing MUFG Bank's strategies in south-east Asia.
RATING SENSITIVITIES
The rating on the proposed bonds is sensitive to any changes in BAY's National Long-Term Rating, which is at the top-end of the scale and therefore no upside is possible.
A downgrade of MUFG Bank's Long-Term Issuer Default Rating could lead to negative rating action on BAY, including action on the National Long-Term Rating.
BAY's ratings could also face negative rating action if MUFG Bank shows a reduced propensity to support BAY, which may, for example, be seen via a significantly reduced shareholding or level of control. However, Fitch believes this is unlikely to occur in the medium term.