Bangkok--13 Nov--Fitch Ratings
Fitch Ratings (Thailand) Limited has assigned a National Long-Term Rating of 'AAA(tha)' to ICBC (Thai) Leasing Company Limited's (ICBCTL; AAA(tha)/Stable/F1+(tha)) upcoming senior unsecured debentures of up to THB3.5 billion. The debentures will be offered in tranches with tenors of up to five years.
The debentures will be issued under ICBCTL's THB30 billion medium-term note programme, which Fitch affirmed at 'AAA(tha)' and 'F1+(tha)' on 2 September 2019.
The proceeds will be used for refinancing and/or general operations.
KEY RATING DRIVERS
ICBCTL's senior notes are rated at the same level as its National Long-Term Rating as they represent the company's unsecured and unsubordinated obligations.
Fitch equalised ICBCTL's rating with that of its parent bank, Industrial and Commercial Bank of China (Thai) Public Company Limited (ICBCT; AAA(tha)/Stable/F1+(tha)) to reflect Fitch's belief that the company is a core subsidiary of ICBCT. ICBCTL operates ICBCT's key hire-purchase business, which represents about a third of its net interest and fee income. Fitch assesses that ICBCTL is an integral part of ICBCT's business and franchise.
RATING SENSITIVITIES
The note ratings are sensitive to changes in ICBCTL's National Long-Term Rating, which is at the top-end of the scale and therefore has no upside.
The National Ratings of both ICBCTL and its senior debt would be similarly affected by any changes in the ratings of ICBCT, which are, in turn, sensitive to a change in parent Industrial and Commercial Bank of China Limited's (A/Stable/bb+) propensity to provide extraordinary support.
Furthermore, ICBCTL's ratings could also be downgraded if Fitch no longer believed that ICBCTL is a core subsidiary of ICBCT. For example, this could arise from a material reduction in ICBCT's ownership or financial commitments. A diminished importance of ICBCTL to ICBCT through sharply lower contributions to ICBCT's asset portfolio, revenue and profit could also reduce the parent's propensity to extend support. However, Fitch believes this is unlikely to occur in the near term.
For full details on the rating drivers and sensitivities for ICBCT and ICBCTL, please see the most recent rating action commentary "Fitch Affirms ICBCT and ICBCTL at 'AAA(tha)'; Outlook Stable ", published 2 September 2019 and available at https://www.fitchratings.com.