Fitch Rates ICBCTL's Senior Notes 'AAA(tha)'

Stocks and Financial Services Press Releases Thursday July 16, 2020 09:31
Bangkok--16 Jul--Fitch Ratings

Fitch Ratings (Thailand) has assigned ICBC (Thai) Leasing Company Limited's (ICBCTL, AAA(tha)/Stable/F1+(tha)) upcoming long-term senior unsecured notes a National Long-Term Rating of 'AAA(tha)'. The notes will be issued under ICBCTL's THB50 billion medium-term note programme, which Fitch rated at 'AAA(tha)/F1+(tha)' on 20 May2020.

The proceeds will be used for refinancing and general operation.
KEY RATING DRIVERS ICBCTL's senior notes are rated at the same level as its National Long-Term Rating as they represent its unsecured and unsubordinated obligations.

The National Ratings of ICBCTL are the same as those of its parent, Industrial and Commercial Bank of China (Thai) Public Company Limited (ICBCT; AAA(tha)/Stable/F1+(tha)), which are in turn driven by support from the ultimate parent, the Industrial and Commercial Bank of China Limited (ICBC, A/Stable/bb+). This reflects Fitch's view that ICBCTL is a core subsidiary of ICBCT, as reflected by a high level of integration, history of ordinary financial support, full ownership and brand sharing. ICBCTL also has important role in supporting the bank's hire purchase, finance lease and factoring business, which comprised about 38% of ICBCT's total revenue and profit in 2019.

RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive rating action/upgrade:
There is no upside to the note ratings, as they are at the top end of the scale.
Factors that could, individually or collectively, lead to negative rating action/downgrade:
The note ratings could be downgraded if ICBCTL's National Long-Term Rating were to be downgraded.

A lower perceived propensity of ICBCT to support ICBCTL could lead to a downgrade of the National Ratings on both ICBCTL and its senior debt. This may occur if ICBCT reduces its ownership to below 75%, withdraws its financial commitment, or undertakes actions indicating a materially lower propensity to provide support. However, Fitch believes this is not likely to occur in the near term.

For full details on the rating drivers and sensitivities for ICBCT and ICBCTL, please see our rating action commentary, Fitch Affirms ICBCT and ICBCTL at 'AAA(tha)'; Outlook Stable, at www.fitchratings.com/site/pr/10087725

BEST/WORST CASE RATING SCENARIO

International scale credit ratings of Financial Institutions and Covered Bond issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. For more information about the methodology used to determine sector-specific best- and worst-case scenario credit ratings, visit [https://www.fitchratings.com/site/re/10111579]

REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING
The principal sources of information used in the analysis are described in the Applicable Criteria.
PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS
The National Long-Term Rating on ICBCTL's notes is related to ICBCT's rating, which is driven by support from the ultimate parent, ICBC.
Additional information is available on www.fitchratings.com

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