Fitch Ratings (Thailand) has assigned KASIKORNBANK Public Company Limited's (KBank, BBB/AA+(tha)/Stable/bbb) upcoming euro-denominated senior unsecured short-term debentures a National Short-Term Rating of 'F1+(tha)'.
The notes will be issued under the bank's THB30 billion medium-term note programme, which allows for issuance in both Thai baht and foreign currencies. The debentures will be offered to institutional investors via a private placement.
KEY RATING DRIVERS
Fitch rates KBank's euro-denominated senior unsecured short-term debentures at the same level as the bank's National Short-Term Rating of 'F1+(tha)'. This is in line with Fitch's criteria since the senior notes constitute the bank's unsecured and unsubordinated obligations.
KBank's National Ratings are driven by its standalone profile, which reflects its strong domestic banking franchise, strength in digital and transactional banking and broadly stable funding profile. This is balanced by some pressure on its financial profile from the pandemic-related economic disruption in 2020 and the slow recovery that we expect in 2021-2022.
KBank's National Ratings are also based on comparisons with other entities rated on the Thai national rating scale. For more details on KBank's rating drivers and sensitivities, see the rating action commentary "Fitch Affirms KASIKORNBANK's IDR at 'BBB'; Support Rating Floor Revised to 'BBB'", dated 26 March 2021, at www.fitchratings.com/site/pr/10156507.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive rating action/upgrade:
Positive rating action on KBank's National Short-Term Rating, and on these notes, is not possible as it is the highest rating on the scale.
Factors that could, individually or collectively, lead to negative rating action/downgrade:
A downgrade of KBank's National Long-Term Rating to below 'AA-(tha)' could lead to a downgrade of its senior unsecured notes' National Short-Term Rating. However, this is unlikely to occur in the near term due to the bank's current National Long-Term Rating of 'AA+(tha)' with Stable Outlook. The recently revised up Support Rating Floor also limits downside to the KBank's National Long-Term Rating.
Unless noted above, the sensitivities for KBank's National Ratings are those outlined in our rating action commentary published on 26 March 2021.
DATE OF RELEVANT COMMITTEE
25 March 2021
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.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. For more information on Fitch's ESG Relevance Scores, visit www.fitchratings.com/esg
Additional information is available on www.fitchratings.com