OREANDA-NEWS. Fitch Ratings has affirmed Poland-based leasing company Europejski Fundusz Leasingowy S. A.'s (EFL) Long-Term Issuer Default Rating (IDR) at 'A-' and National Long-Term Rating at 'AA(pol)'. The Outlook on both ratings is Positive. Fitch has also affirmed EFL's Support Rating at '1'. A full list of rating actions is available at the end of this rating action commentary.

KEY RATING DRIVERS

EFL's ratings reflect Fitch's view of an extremely high probability of support, if needed, from the company's 100% owner, Credit Agricole S. A. (CASA; A/Positive), the central body of Credit Agricole (CA; A/Positive). The Positive Outlook on EFL's Long-Term IDR and National Long-Term Rating reflects that on the parent.

Fitch's opinion on potential support available to EFL from its parent is based on CA's strong credit risk profile and Fitch's view of CA's commitment to Poland in general, and EFL. This has been evidenced by CASA's long-term ownership of EFL, substantial ordinary funding support provided to the subsidiary and CASA's other material investments in the local financial market, including Credit Agricole Bank Polska (CABP). EFL's fairly strong franchise among local SMEs (due to the company's leading position in the leasing market) and opportunities for cross-selling to CABP (only partly utilised) underpin the parent's propensity to support. Close operational integration with and supervision by the parent, including EFL's partial rebranding, underpin the narrow notching between CA's and EFL's IDRs.

Nevertheless, Fitch views EFL as having only moderate strategic importance for CA due to its small contribution to the group's profits and CA's limited presence in central and eastern Europe.

EFL is to a significant extent reliant on CASA for funding. At end-1Q16, CASA provided around 63% of the company's total funding either directly (around 40%) or through guarantees on most loans from international financial institutions (IFIs; around 22%). Non-parental wholesale funding sources were reasonably diversified between loans from IFIs (23% of total funding), loans from commercial banks (26%) and bonds issued (11%). Rollover risk from bonds is mitigated by liquidity support available from the parent.

RATING SENSITIVITIES

EFL's Long-Term IDR and National Long-Term Rating would likely be upgraded if CASA is upgraded. The company's ratings could be downgraded if CA's commitment to the Polish market weakens, although Fitch views this as unlikely.

The rating actions are as follows:

Long-Term IDR: affirmed at 'A-'; Outlook Positive

Short-Term IDR: affirmed at 'F1'

National Long-Term Rating: affirmed at 'AA(pol)'; Outlook Positive

National Short-Term Rating: affirmed at 'F1+(pol)'

Support Rating: affirmed at '1'