OREANDA-NEWS. April 13, 2015. Fitch Ratings has affirmed the Long-Term Ratings on Azure Orbit II International Finance Limited's (Azure Orbit II) USD1bn medium-term note (MTN) programme and USD500m note issue at 'A'. The notes are due in April 2019.

KEY RATING DRIVERS - MTN Programme

Guaranteed notes issued under the MTN programme represent direct, general, unconditional and unsecured obligations of Bank of Communications Co., Ltd (BOCOM; A/Stable) by virtue of the deed of guarantee given by the bank's Macau Branch in favour of Azure Orbit II's MTN programme. Such obligations rank pari passu with all other present and future unsecured obligations of the Macau Branch. The affirmation of the programme's rating reflects the ratings expected to be assigned to senior notes issued under the programme, and is in line with BOCOM's Long-Term Issuer Default Rating (IDR) of 'A'. BOCOM's IDR is in turn based on an extremely high probability of support, if required, from the Chinese government (A+/Stable).

Azure Orbit II is an offshore special purpose vehicle managed by Bank of Communications Financial Leasing Co., Ltd (BOCOM Leasing; A/Stable), a wholly owned subsidiary of BOCOM. BOCOM Leasing is strongly integrated with BOCOM and is a key subsidiary providing financial leasing services for the bank's customers. Fitch views the Macau Branch as part of the same legal entity and plays an important role in developing the bank's overseas businesses.

KEY RATING DRIVERS - Senior Notes

The notes were issued under Azure Orbit II's MTN programme. The notes represent senior obligations of BOCOM, and are affirmed in line with BOCOM's Long-Term Issuer Default Rating (IDR) of 'A'. Furthermore, the notes are unconditionally and irrevocably guaranteed by the Macau Branch.

RATING SENSITIVITIES - MTN Programme, Senior Notes

Any changes to ratings on the programme and the notes issued under the programme will be directly correlated to changes in BOCOM's IDR, which in turn will reflect any shift in the perceived propensity or ability of China's government to support BOCOM in a full and timely manner. Should the deed of guarantee given by Macau Branch no longer be effective, then the rating on the programme could be downgraded.