Fitch Affirms BAM at #AA-(tha)#; Outlook Negative

Stocks and Financial Services Press Releases Friday August 17, 2018 18:52
Bangkok--17 Aug--Fitch Ratings
Fitch Ratings (Thailand) has affirmed Bangkok Commercial Asset Management Public Company Limited's (BAM) National Long-Term Rating at 'AA-(tha)' with a Negative Outlook.
A full list of rating action is at the end of this commentary.
KEY RATING DRIVERS

BAM's ratings are driven by sovereign support. BAM is fully owned by the Financial Institutions Development Fund (FIDF), which is a unit of the Bank of Thailand. BAM was established in 1998 to manage distressed assets arising from a financial crisis, although its policy role has gradually diminished as Thailand's financial sector has recovered. Nonetheless, BAM still plays an important role as the country's largest distressed asset manager, with sound operating performance and consistent profitability. BAM has benefitted from ongoing state support, as evident by regulatory advantages, such as its notes being classified as liquid assets as well as tax exemptions. This supports BAM's funding ability and profitability.

The Negative Outlook reflects FIDF's plan to privatise BAM through a stock-exchange listing. Fitch believes the listing may take place in the near term as the process has been ongoing since 2014. Full details and timelines have not been disclosed, but the privatisation plan continues to progress and suggests the state does not see BAM as a long-term core holding. It is possible that BAM's regulatory advantages will be removed after the listing.

BAM's senior bonds are rated at the same level as its National Long-Term Rating as they represent its unsubordinated and unsecured obligations.
RATING SENSITIVITIES

Changes in shareholding structure are likely to negatively affect BAM's ratings. The extent of the downgrade would depend on BAM's continued linkage with the state and level of ownership. Fitch would rate BAM on a standalone basis if the state's shareholding fell below 50% and BAM's regulatory advantages were removed, as extraordinary support from the government could not be relied upon. This could see BAM's National Long-Term Rating downgraded by multiple notches. The final rating would also depend on Fitch's expectations for BAM's leverage and overall financial profile.

A reversal of the plan to partially privatise BAM and signs of a long-term commitment by the state to maintain its shareholding in BAM and BAM's regulatory advantages would lead to a revision of the Outlook to Stable and a possible re-assessment of the National Long-Term Rating. Delays or signs of increasing uncertainty in the listing timeline beyond Fitch's typical rating horizon could lead to a reassessment of the rating and Outlook.

Any changes to BAM's National Long-Term Rating will have a similar effect on the issue ratings.
The rating actions are as follows:
National Long-Term Rating affirmed at 'AA-(tha)'; Outlook Negative
National Short-Term Rating affirmed at 'F1+(tha)'
National Long-Term Rating on outstanding senior unsecured bonds affirmed at 'AA-(tha)'

Latest Press Release

Infineon Technologies AG announces results for the fourth quarter of its 2018 fiscal year

Following a successful 2018 fiscal year Infineon confirms its targets for revenue, Segment Result and investments that were raised in June. Further dividend increase planned - Q4 FY 2018: Revenue EUR 2,047 million, plus 5 percent quarter-on-quarter;...

SET announces 63 listed firms, five CEOs nominated for SET Awards 2018

63 listed companies and five CEOs have been nominated for SET Awards 2018. The announcement and the award presentation, which is the fifteenth of its kind, will take place on November 27, 2018. SET President Pakorn Peetathawatchai said that The Stock...

Fitch Ratings: Global Power Synergy Still on Watch after Appeal of Regulator Decision

The ratings on Global Power Synergy Public Company Limited (GPSC) remain on Rating Watch Negative (RWN) after the company said it submitted an appeal of the Energy Regulatory Commission's (ERC) order to block GPSC's acquisition of GLOW Energy Public...

Fitch Affirms Makro#s Rating at #A(tha)#; Outlook Stable

Fitch Ratings (Thailand) Limited has affirmed Siam Makro Public Company Limited's National Long-Term Rating at 'A(tha)'. The Outlook is Stable. KEY RATING DRIVERS Overseas Expansion Drives Rising Leverage: Makro's funds from operations (FFO) adjusted...

Fitch Affirms CP ALL#s Ratings at #A(tha)#; OutlookStable

Fitch Ratings (Thailand) Limited has affirmed retailer CP ALL Public Company Limited's National Long-Term Rating at 'A(tha)' with a Stable Outlook. Fitch has also affirmed the National Long-Term Rating of its secured bonds at 'A(tha)', the National...

Related Topics