Fitch Rates CIMB Thai Bank's Short-Term Programme at 'F1+(tha)'
This programme will replace CIMBT's existing THB34bn short-term debenture programme, which expires on 29 July 2016. Debentures issued under the programme will have a maturity of no more than 270 days, and can be issued in separate tranches. Proceeds will be used for its banking businesses.
KEY RATING DRIVERS
The programme is rated at the same level as CIMBT's National Short-Term Rating of 'F1+(tha)' as the issuance under the programme will constitute direct unsubordinated and unsecured obligations of the bank.
The National Ratings of CIMBT reflect Fitch's view of a high probability that the bank would receive extraordinary support from its Malaysia-based parent, CIMB Bank Berhad (CIMB), if required. Fitch sees CIMBT as a strategically important subsidiary of CIMB - based on the latter's near-full ownership (93.7%) of the Thai bank, their name sharing, strong integration and evidence of operational and financial support.
RATING SENSITIVITIES
The National Short-Term Rating on CIMBT's programme is the highest on the national scale and, hence, no rating upside is possible.
CIMBT's National Ratings are support-driven. Therefore, material changes in the credit profile at CIMB are likely to have a similar effect on the National Ratings of CIMBT.
An indication of material weakening of CIMB's propensity to provide extraordinary support to CIMBT could result in a downgrade of the National Ratings. For example, this could result from a significant reduction in ownership or level of commitment to provide financial support. However, Fitch does not view this as likely in the near term.
Other ratings of CIMBT are unaffected and are as follows:
CIMBT:
- National Long-Term Rating at 'AA-(tha)'; Outlook Stable
- National Short-Term Rating at 'F1+(tha)'
- National Short-Term Ratings on short-term debt programme at 'F1+(tha)'
- National Long-Term Rating on subordinated debt (Lower Tier 2) at 'A+(tha)'
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