August 21, 2012 / 8:02 AM / in 5 years

TEXT-Fitch asgns expected rtg to ICBCTL's guaranteed bonds

(The following statement was released by the rating agency)

Aug 21 - Fitch Ratings (Thailand) Limited has assigned an expected National Long-Term Rating of ‘AAA(tha)(exp)’ to guaranteed bonds amounting up to THB4bn to be issued by ICBC (Thai) Leasing Company Limited (ICBCLT). The Outlook is Stable.

The rating is based entirely on an irrevocable and unconditional guarantee provided by Industrial and Commercial Bank of China (Thai) Public Company Limited (ICBCT), which is rated ‘AAA(tha)'/Stable. ICBCT’s rating reflects its near full ownership by and high probability of support from its parent - Industrial and Commercial Bank of China Limited (ICBC, ‘A’/Stable). Any changes in the rating of ICBCT - the guarantor - will be driven by either a change in the rating of ICBC or a reassessment of the prospects of support from ICBC. These changes would impact the rating of the guaranteed bonds issued by ICBCTL.

ICBCTL (formerly Leasing Sinn Asia Company Limited) is a wholly owned subsidiary of ICBCT and has been in the hire purchase and leasing business since 2005, now acting as ICBCT’s flagship company for this business in Thailand. The company has expanded its loan portfolios significantly since 2010, when ICBC became the largest shareholder of ICBCT. At end-2011, ICBCTL’s asset size stood at THB31.8bn, representing one third of ICBCT’s assets. The company contributed about 22% to ICBCT’s net profit. At end-2011, it was ranked number nine in Thailand’s hire purchase and financial lease industry with a market share of around 3%.

ICBCT is one of Thailand’s small-sized full-licensed banks. It is now 97.7%-owned by ICBC, and this ownership is intended to be a long-term holding. ICBCT has leveraged off ICBC’s strong franchise name and increased operational integration with ICBC. ICBCT has aligned its strategy with the parent bank to focus on facilitating bilateral trade between Thailand and China. ICBCT also has strong liquidity support and capital commitment from the parent, which Fitch considers as key support drivers for the ratings.

For more information on ICBCT, please refer to the credit report dated 11 November 2011 and to the rating action commentary entitled, “Fitch Upgrades ICBC (Thai) to ‘AAA(tha)'; Outlook Stable”, dated 7 June 2012, available at www.fitchratings.com.

The final rating is contingent upon receipt of final documents conforming to information already received and the Office of Securities and Exchange Commission approval of the bond issuance.

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