Bangkok--11 Sep--Moody's Investors Service
Moody's has assigned a Ba1 rating to Krung Thai Bank Public Company Limited's (KTB, D-/Baa1/P-2) Hybrid Tier 1 securities being issued via its Singapore branch. The rating outlook is stable. The securities are being issued under the new guidelines of Bank of Thailand governing Hybrid-Tier 1 securities.
"The Ba1 rating reflects the structure of the issue, KTB's moderate financial fundamentals and Thailand's supportive regulatory regime," says Leo Wah, a Moody's Assistant Vice President/Analyst.
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 KTB's Hybrid Tier 1 securities is non-cumulative and under certain circumstances may be deferred. If implemented, such provisions, while not legally constituting an event of default, could result in payment terms appreciably different from senior securities.
"This distinction and the ranking of the securities in liquidation (after subordinated debt, but before common and preferred shares) are reflected
in the three notch rating differential between the institution's senior obligations and this subordinated debt issue," adds Wah.
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).
The 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.
Headquartered in Bangkok, Thailand, KTB is Thailand's second largest bank, with total assets of Bt 1,188 billion (US$32 billion) as of June 30, 2006.
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, CFA
Asst Vice President - Analyst
Financial Institutions Group
Moody's Asia Pacific Ltd.
JOURNALISTS: (852) 2916-1150
SUBSCRIBERS: (852) 2916-1121
Singapore
Beatrice Woo
VP - Senior Credit Officer
Financial Institutions Group
Moody's Singapore Pte Ltd.
JOURNALISTS: (852) 2916-1150
SUBSCRIBERS: (65) 6398-8308