TRIS Rating Co., Ltd. announces today that it still maintains the “A” rating for Bank of Ayudhya PLC (BAY) and the “A-” rating for BAY’s subordinated debentures with “stable” outlook after BAY’s Board of Directors agreed on 17 May 2006 to accept the Letter of Intent (LOI) of GE Capital Asia Pacific Ltd. to subscribe BAY’s newly-issued ordinary shares at the subscription price of Bt16 per share. The board also resolved that the size of proposed subscription by GE Capital Asia Pacific Ltd. of up to approximately 25% of BAY’s registered and paid-up capital inclusive of full conversion of all the outstanding warrants will be subject to the consent of Bank of Thailand (BOT).
TRIS Rating said, BAY’s current credit ratings have been taken into account the bank’s strong strategic alliance with GE Money Retail Bank in credit card business. TRIS Rating expects that if the subscription succeeds, BAY’s capital structure will be strengthened. However, the BOT’s consent is crucial to the success of the deal, due to regulatory limits on foreign shareholding limit and “One Presence” Policy. By regulations, a financial institution is prohibited from holding more than 5% stake in any other financial institutions. Under the “One Presence” Policy contained in the Financial Sector Master Plan, a financial institution can hold only one type of deposit-taking institution in a financial conglomerate, but GE Money Retail Bank and BAY are both the same type of deposit-taking institutions.
If the transaction occurs, TRIS Rating will fully review BAY’s business and financial profile and will further announce the updated ratings to public. Currently, BAY has been assigned a “A” company rating and a “A-” issue rating with “stable” outlook by TRIS Rating. -- End
Bank of Ayudhya PLC (BAY)
Company Rating: A
Issue Rating:
BAY13NA: Bt12,000 million subordinated debentures due 2013 A-
Rating Outlook: Stable
TRIS Rating said, BAY’s current credit ratings have been taken into account the bank’s strong strategic alliance with GE Money Retail Bank in credit card business. TRIS Rating expects that if the subscription succeeds, BAY’s capital structure will be strengthened. However, the BOT’s consent is crucial to the success of the deal, due to regulatory limits on foreign shareholding limit and “One Presence” Policy. By regulations, a financial institution is prohibited from holding more than 5% stake in any other financial institutions. Under the “One Presence” Policy contained in the Financial Sector Master Plan, a financial institution can hold only one type of deposit-taking institution in a financial conglomerate, but GE Money Retail Bank and BAY are both the same type of deposit-taking institutions.
If the transaction occurs, TRIS Rating will fully review BAY’s business and financial profile and will further announce the updated ratings to public. Currently, BAY has been assigned a “A” company rating and a “A-” issue rating with “stable” outlook by TRIS Rating. -- End
Bank of Ayudhya PLC (BAY)
Company Rating: A
Issue Rating:
BAY13NA: Bt12,000 million subordinated debentures due 2013 A-
Rating Outlook: Stable