Fitch Ratings (Thailand) has assigned a National Long-Term Rating of 'BB(tha)' to KTBST Securities Public Company Limited's (KTBSTSEC, BB+(tha)/Stable/B(tha)) upcoming issue of up to THB550 million in subordinated unsecured debentures.
The debentures will have a maturity of one year. The company plans to use the proceeds for the repayment of maturing subordinated debentures and for working capital.
KEY RATING DRIVERS
The National Long-Term Rating on the subordinated debentures is one notch below KTBSTSEC's National Long-Term Rating to reflect the subordinated debentures' higher loss-severity risk relative to senior unsecured instruments. This arises as subordinated noteholders rank after senior creditors in the priority of claims.
Additional notching has not been applied due to the lack of going-concern loss-absorption and equity conversion features. Fitch uses the Corporate Hybrids Treatment and Notching Criteria for this assessment, in line with our approach for other Thai securities firms.
For further detail on KTBSTSEC's Key Rating Drivers and Rating Sensitivities, please see our latest rating action commentary, dated 10 January 2022.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive rating action/upgrade:
The National Long-Term Rating on the subordinated debentures is sensitive to changes in KTBSTSEC's National Long-Term Rating. Hence, an upgrade of KTBSTSEC's National Long-Term Rating is likely to lead to similar action on the rating of the subordinated debentures.
Factors that could, individually or collectively, lead to negative rating action/downgrade:
A downgrade of KTBSTSEC's National Long-Term Rating would result in a downgrade of the subordinated debenture rating.
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.
Additional information is available on www.fitchratings.com