May 9, 2017 / 4:58 AM / 4 months ago

Fitch Revises Outlooks on Bank of Ayudhya, Easy Buy to Stable

(The following statement was released by the rating agency) BANGKOK/SINGAPORE, May 09 (Fitch) Fitch Ratings has today revised the rating Outlooks on Bank of Ayudhya Public Company Limited (BAY) and Easy Buy Public Company Limited (EB) to Stable from Negative. At the same time, Fitch has affirmed the Long-Term Issuer Default Rating (IDR) of BAY at 'A-' and the National Long-Term Rating of EB at 'AA+(tha)'. All other ratings of the issuers are not immediately affected by our action today. The Outlook revisions follows the similar revision in the Outlooks in BAY's parent, Bank of Tokyo-Mitsubishi UFJ Ltd. (BTMU) and EB's parent, ACOM Co., Ltd. (ACOM), on 2 May 2017 (see <a href="https://www.fitchratings.com/site/pr/1023018"> Fitch Revises Outlooks for Japanese Major Banks to Stable; Upgrades VR of MHFG). The revision of Outlooks came after the affirmation of Japan's sovereign rating at 'A' and revision of the Outlook to Stable from Negative on 27 April 2017 (see <a href=" here">Fitch Revises Outlook on Japan to Stable; Affirms at 'A'). A full list of rating actions is at the end of this rating action commentary. KEY RATING DRIVERS BAY's Long-Term IDR and EB's National Long-Term Rating are driven by Fitch's view that these entities are strategically important subsidiaries of their respective parents BTMU and ACOM. This is due to high levels of parent shareholding and control, management integration, and histories of support. Hence Fitch believes there would be a high probability of extraordinary support for the subsidiaries if required. The Stable Outlooks are consistent with the Stable Outlooks of the parents. RATING SENSITIVITIES BAY's Long-Term IDR of 'A-' is unlikely to be upgraded as it is currently rated at Thailand's Country Ceiling; however, a downgrade of its parent's Long-Term IDR could result in a similar rating action at BAY. Any changes in the ratings or credit profile at ACOM would similarly affect the National Long-Term Rating of EB. An indication of material weakening in the parents' propensity to provide extraordinary support to their respective subsidiaries could result in downgrade the ratings. For example, this could be indicated by a significant reduction in ownership in the subsidiaries or level of commitment to provide financial support. However, Fitch does not view this as likely in the medium term. The following ratings are not affected by this action and remain unchanged: BAY Short-Term IDR: 'F2' Viability Rating: 'bbb' Support Rating: '1' National Long-Term Rating affirmed at 'AAA(tha)'; Stable Outlook National Short-Term Rating: 'F1+(tha)' National Long-Term Rating on senior unsecured debt: 'AAA(tha)' National rating on Legacy Basel II subordinated debt: 'AA+(tha)' National rating on subordinated debt Basel III Tier 2: 'AA+(tha)' EB: National Short-Term Rating: 'F1+(tha)' National Long-Term Rating on senior unsecured bonds: 'AA+(tha)' Contact: Primary Analysts Ambreesh Srivastava (BAY International Ratings) Senior Director +65 6796 7218 Fitch Ratings Singapore Pte Ltd 6 Temasek Boulevard #35-05 Suntec Tower Four Singapore 038986 Parson Singha (BAY National Ratings) Senior Director +66 2108 0151 Fitch Ratings (Thailand) Limited Park Ventures, Level 17 57 Wireless Road, Lumpini, Patumwan, Bangkok 10330 Patchara Sarayudh (EB) Director +66 2108 0152 Secondary Analysts Parson Singha (BAY International Ratings) Senior Director +66 2108 0151 Jackerin Jeeradit (BAY National Ratings) Associate Director +66 2108 0163 Thanasit Utamaphethai (EB) Associate Director +66 2108 0154 Committee Chairperson Jonathan Cornish Managing Director +852 2263 9901 Media Relations: Leslie Tan, Singapore, Tel: +65 67 96 7234, Email: leslie.tan@fitchratings.com. Note to Editors: Fitch's National ratings provide a relative measure of creditworthiness for rated entities in countries with relatively low international sovereign ratings and where there is demand for such ratings. The best risk within a country is rated 'AAA' and other credits are rated only relative to this risk. National ratings are designed for use mainly by local investors in local markets and are signified by the addition of an identifier for the country concerned, such as 'AAA(tha)' for National ratings in Thailand. Specific letter grades are not therefore internationally comparable. 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