TRIS Rating Co., Ltd. has changed the rating outlook of Bualuang Securities PLC (BLS) to “positive” from “stable”, following the submission of a tender offer by Bangkok Bank PLC (“BBL”) on 14 November 2011 to purchase all the shares issued by BLS which are currently owned by other shareholders. TRIS Rating expects that BLS would have a stronger support from the BBL Group if the tender offer is successful.
TRIS Rating said that the “positive” outlook is based on TRIS Rating’s belief that the company rating of BLS has the likelihood to be enhanced by stronger support from BBL in case BBL successfully obtains full control over BLS as planned. The stronger support will come because BLS will become more strategically important for BBL and its business model be more closely aligned with that of BBL.
At the same time, TRIS Rating has also affirmed the company rating of BLS at “A-”. The rating is enhanced from BLS’s stand-alone credit profile to reflect its status as a strategically important member of BBL Group. BBL is the largest shareholder and provides both financial and business support to BLS. The stand-alone rating is based on BLS’s solid franchise in brokerage and investment banking, its capable and conservative management team, and strong liquidity and capital positions. The rating also takes into account the potential benefits from leveraging the BBL Group’s nationwide network and business relationships. However, the rating is constrained by the increasingly competitive operating environment, high volatility of the Thai stock market, and the looming challenge from the full liberalization of brokerage fees due to take effect in 2012. -- End
Company Rating: Affirmed at A- Rating Outlook: Positive from Stable
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