OREANDA-NEWS. Fitch Ratings has today revised the Outlook on The Export-Import Bank of the Republic of China (Taiwan's Eximbank) to Positive from Stable and affirmed its Long-Term Foreign-Currency Issuer Default Rating at 'A+'. At the same time, Fitch has affirmed the bank's National Long-Term Rating at 'AAA(twn)' with a Stable Outlook, Support Rating at '1' and Support Rating Floor at 'A+'. A full list of rating actions is at the end of this rating action commentary.

The rating actions follow a revision of Taiwan's rating Outlook to Positive from Stable on 12 October 2015. (see "Fitch Affirms Taiwan at 'A+'; Outlook Revised to Positive" at www.fitchratings.com).

KEY RATING DRIVERS
IDRS, NATIONAL RATINGS, SUPPORT RATING, SUPPORT RATING FLOOR AND SENIOR DEBT

The IDRs, Support Rating Floor and Outlook for Taiwan's Eximbank remain aligned with those of the Taiwan sovereign, reflecting Fitch's expectations of the extremely high probability of extraordinary support from the government in the event it is required. As such, the bank's Support Rating is at '1'. The policy bank is wholly owned by the state and is entitled to loss compensation from the state under The Export-Import Bank of the Republic of China Act. The bank is tasked with promoting trade and developing the Taiwanese economy and its policy mission is important given the country's export-dependent economic structure.

Taiwan's Eximbank's linkage to the government remained strong in the past year, including funding and export insurance contributions from various government agencies and the central bank. In light of the slowing exports for the year to date in Taiwan, the government is contemplating measures to reinforce the bank's policy role of promoting the nation's exports by expanding its lending capacity. The measures include planned rights issues of TWD3.8bn in 2016 and TWD5bn each in 2017 and 2018, and adding policy objectives, such as export-related credit growth, to its key performance indicators.

Taiwan's Eximbank's senior unsecured bonds are rated at the same level as its National Long-Term Rating, reflecting the relative vulnerability of default on its senior obligations within a national scale for Taiwan.

RATING SENSITIVITIES
IDRS, NATIONAL RATINGS, SUPPORT RATING, SUPPORT RATING FLOOR AND SENIOR DEBT

Any rating action on Taiwan sovereign could trigger a similar rating action on the IDRs and Support Rating Floor of Taiwan's Eximbank's. The latter's National Long-Term Rating, however, has a Stable Outlook, as its 'AAA(twn)' rating will still be commensurate with a'AA-' IDR should the Taiwan sovereign be upgraded. The bank's senior debt rating will also remain unchanged should the Taiwan sovereign be upgraded.

The rating actions are as follows:

Long-Term IDR affirmed at 'A+'; Outlook revised to Positive from Stable
Short-Term IDR affirmed at 'F1'
National Long-Term Rating affirmed at 'AAA(twn)'; Outlook Stable
National Short-Term Rating affirmed at 'F1+(twn)'
Support Rating affirmed at '1'
Support Rating Floor affirmed at 'A+'
Senior unsecured debt affirmed at 'AAA(twn)'