TRIS Rating has placed the company and senior debenture ratings of Ayudhya Capital Auto Lease PLC (AYCAL) on CreditAlert with a “developing” implication. The rating action follows the recent change in the major shareholder of AYCAL’s parent company, Bank of Ayudhya PLC (BAY), rated “AAA” with “stable” outlook by TRIS Rating. The change in BAY’s major shareholder from GE Capital International Holdings Corporation (GECIH) to the Bank of Tokyo-Mitsubishi UFJ, Ltd. (BTMU) might lead to changes in AYCAL’s business direction and financial policy, as well as the degree of support from BAY in the future.
AYCAL’s ratings reflect an enhancement from its stand-alone rating as it is a core strategic subsidiary of BAY. AYCAL is BAY’s core subsidiary in the automobile hire purchase business, which strongly supports BAY’s universal banking platform. As of June 2013 AYCAL’s total loans and receivables accounted for 25% of BAY’s consolidated loans. Net income of AYCAL for the first half of 2013 contributed 43% to BAY’s consolidated net income for the same period. Business and financial supports from BAY are expected to further enhance AYCAL’s market position in its core businesses and improve its financial flexibility. AYCAL is one of the subsidiaries getting priority from BAY’s financial supports, as reflected in the proportion of outstanding amount of lending from BAY to AYCAL at 62% of BAY’s total lending to subsidiaries as of June 2013.
TRIS Rating expects to resolve the CreditAlert after AYCAL’s business plan, financial policy, and the degree of support from BAY have been reviewed.
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