Bangkok--20 Apr--Moody's Asia Pacific
Moody's has assigned a provisional rating of (P)Ba2 to TMB Bank Public Company Limited's (TMB, E+ on Review for Possible Upgrade/Baa2/P-2) proposed perpetual securities via a Cayman Islands branch. The rating outlook is stable. The proposed securities will be issued under the new guidelines of Bank of Thailand governing Hybrid-Tier 1 securities.
The provisional rating of the Hybrid Tier-1 issue is subject to the receipt of final documentation with terms and conditions which show no material change from those already reviewed by Moody's.
The (P)Ba2 rating reflects the structure of the issue, TMB's moderate financial fundamentals and Thailand's supportive regulatory regime. Under the terms of the securities, the issuer can call the securities after 10 years. Typical of many Tier I capital-qualifying hybrid security issues, interest on TMB's Hybrid Tier 1 securities is non-cumulative and under certain circumstances may be deferred at the issuer's option. If implemented, such provisions, while not legally constituting an event of default, could result in payment terms appreciably different from senior securities. This distinction has been reflected in the three notch rating differential between the institution's senior obligations and this subordinated debt issue.
The instrument will, in Moody's view, have sufficient equity-like features to allow it to receive basket "B" treatment, i.e. 25% equity and 75% debt, for financial leverage purposes (please refer to Moody's Rating Methodology "Refinements to Moody's Tool Kit: Evolutionary, not Revolutionary!" of February 2005).
Headquartered in Bangkok, Thailand, TMB had total assets of about Bt 717 billion (US$ 18 billion) as at December 31, 2005. The Thai military's aggregate stake in TMB has declined significantly since the Asian financial crisis of 1997 and currently stands at about 5%. The Thai Ministry of Finance is the largest shareholder with 31.2%. Singapore's
DBS Bank holds 16.1%.
Moody's Investors Service is a publisher of rating opinions and research. It is not involved in the offering or sale of any securities, nor is it acting on behalf of the offering party. This release is not a solicitation or a recommendation to buy, hold or sell securities.
Hong Kong
Leo Wah
Asst Vice President - Analyst
Financial Institutions Group
Moody's Asia Pacific Ltd.
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Singapore
Beatrice Woo
Vice President - Senior Analyst
Financial Institutions Group
Moody's Singapore Pte Ltd.
JOURNALISTS: (852) 2916-1150
SUBSCRIBERS: (65) 6398-8308