Fitch: Bank of Ayudhya bonds AAA(tha)

Fitch Ratings said it assigned a national long-term rating of AAA(tha) to Bank of Ayudhya PCL's upcoming issue of senior unsecured bonds.

The bonds will have tenor or tenors of two or three years, the agency said, and the total issue size will be up to 15 billion in Thai baht.

The proceeds will be used for refinancing and general corporate purposes, Fitch said.

The bonds are rated at the same level as the bank’s national long-term rating as they represent unsubordinated and unsecured obligations of the bank, the agency said.

The bank also has a long-term issuer default rating of A-, short-term issuer default rating of F2, viability rating of BBB, national long-term rating of AA(tha), national short-term rating of F1+(tha), national long-term rating on its senior unsecured debt of AAA(tha) and rating on its legacy Basel II subordinated debt of AA+(tha).

The ratings are driven by institutional support from its parent, the Bank of Tokyo-Mitsubishi UFJ, Ltd., which holds 76.9% of the Thai bank, Fitch explained.

The agency said it views the bank as a strategically important subsidiary of Bank of Tokyo-Mitsubishi with high levels of management control, marketing linkages and operational integration.

The rating on the bonds is sensitive to any changes in Bank of Ayudhya's national rating, the agency added.

The rating also could be negatively impacted if Bank of Tokyo-Mitsubishi shows a reduced propensity to support the bank, Fitch said.

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