Moody's gives AmBank shares Ba2

Moody's Investors Service said it has assigned a rating of provisional Ba2 to the proposed issue of perpetual, non-cumulative non-voting guaranteed preference shares by AMBB Capital (L) Ltd., AmBank (M) Bhd.'s wholly owned special purpose vehicle.

The agency said the rating reflects the issue's structure, AmBank's subordinated guarantee and Malaysia's supportive regulatory regime.

The outlook is stable.

Moody's noted that typical of many Tier I capital-qualifying issues, the dividends on AMBB Capital's preference shares are non-cumulative and may be limited. If implemented, such provisions, while not legally constituting an event of default, could result in payment terms appreciably different from senior securities.

The agency said this distinction as well as the preference shares' ranking in liquidation is reflected in the three-notch rating differential between AmBank's Baa2 long-term deposits and this issue.

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