Fitch gives F1+(tha) rating to CIMB Thai Bank
Fitch Ratings (Thailand) has assigned a National Short-Term Rating of ‘F1+(tha)’ to CIMB Thai Bank Plc’s (CIMBT; AA(tha)/Stable/F1+(tha)) short-term debenture programme of Bt30 billion.
This programme replaced CIMBT’s previous Bt34 billion short-term debenture programme, which expired on July 28.
Debentures issued under the programme will have a maturity of no more than 270 days, and can be issued in separate tranches until July 27 of next year. Proceeds will be used for liquidity management.
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.
CIMBT’s National Ratings are driven by institutional support.
Fitch believes CIMBT is a strategically important subsidiary of its parent, Malaysia-based CIMB Bank.
The parent holds nearly full ownership (94.1 per cent) of CIMBT, retains full management control of the Thai operations and integrates CIMBT closely with the parent group.
CIMB also allows the CIMBT to share its brand and has been providing support, financially and operationally.
RATING SENSITIVITIES
The National Short-Term Rating on CIMBT’s programme is the highest on the national scale, so no rating upside is possible.
CIMBT’s National Ratings are support-driven, so material changes in the credit profile at CIMB would likely have a similar effect on the National Ratings of CIMBT.
Fitch may downgrade CIMBT’s National Ratings if they determine that CIMB has a lower propensity to provide its Thai subsidiary extraordinary support, as indicated by a large decrease in ownership or a lower commitment to provide financial support.
Neither scenario is expected by Fitch.
