Fitch: Bank of China notes A

Fitch Ratings said it assigned a expected long-term rating of A to Bank of China Ltd. Taipei branch’s yen-denominated senior unsecured notes, along with an expected national long-term rating of AA+(twn).

The issue size is expected to be ¥3 billion in total and it will be issued in late June 2015 in four tranches with five-year, seven-year, 10-year and 15-year maturities, Fitch said.

The notes will be issued by the bank’s Taipei branch to Taiwan-based investors under its $20 billion medium-term note program.

The bank increased the size of its program to $20 billion from $10 billion on June 18 to support its asset expansion, Fitch said.

The proceeds from the notes will be used to support the bank’s Taipei branch’s offshore yen-denominated business and strengthen its yen-denominated funding base, the agency said.

The agency said the Taipei branch is part of the legal entity of Bank of China. Therefore, the notes to be issued under the program represent direct, unconditional, unsecured and unsubordinated obligations of the bank and are rated in line with the bank’s long-term issuer default rating of A, Fitch said.

The bank’s ratings also are underpinned by expectations of an extremely high probability of support from the Chinese government in the event of stress, the agency added.

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