OREANDA-NEWS. Fitch Ratings has today assigned Bank of Ayudhya Public Company Limited's (BAY; AAA(tha)/Stable) upcoming issue of senior unsecured bonds National Long-Term Ratings of 'AAA(tha)'.

The bonds will have a tenor of three years, and the total issue size will be up to THB8bn (plus a greenshoe portion of up to THB4bn). Proceeds of the issue will be used for refinancing and/or general corporate purposes.

KEY RATING DRIVERS

The bonds are rated at the same level as BAY's National Long-Term Rating, as they represent unsubordinated and unsecured obligations of the bank.

BAY's National Ratings reflect Fitch's belief that it is a strategically important subsidiary of its parent the Bank of Tokyo-Mitsubishi UFJ, Ltd (BTMU; A/Stable). BTMU holds 76.9% of BAY, and the Thai bank is a key part of the parent's strategy for Southeast Asia.

RATING SENSITIVITIES

The National Ratings of BAY are at the top end of the scale, and no upside is possible.

A downgrade of the Long-Term Issuer Default Rating of BTMU could lead to negative rating actions on BAY, including on the National Long-Term Rating.

BAY's ratings could also be negatively impacted if BTMU shows a reduced propensity to support BAY - which may, for example, be seen via a significantly reduced shareholding or reduction in operational integration. However, Fitch views that this would be unlikely in the medium term.

BAY's other ratings are not affected, and are as follows:

Long-Term Issuer Default Rating: 'A-'; Outlook Stable
Short-Term Issuer Default Rating: 'F2'
Viability Rating: 'bbb'
Support Rating: '1'
National Long-Term Rating: 'AAA(tha)'; Outlook Stable
National Short-Term Rating: 'F1+(tha)'
National long-term rating on senior unsecured debt: 'AAA(tha)'
National short-term rating on senior unsecured debt: 'F1+(tha)'
Rating on Legacy Basel II subordinated debt: 'AA+(tha)'.