Moody's ranks BBL debt Baa3
published : 26 Sep 2019 at 04:01
newspaper section: Business
Moody's Investors Service has assigned a Baa3(hyb) foreign currency subordinated debt rating to Bangkok Bank's (BBL, Baa1 positive, baa1) US subordinated notes, issued under its US$5 billion global medium term note programme.
The subordinated notes will be treated as Tier 2 capital, with loss absorption triggered upon the occurrence of a non-viability event.
The drawdown will be carried out from the bank's Hong Kong branch, and the bonds will be listed on the Singapore Stock Exchange.
The Baa3(hyb) rating is positioned two notches below BBL's baa1 adjusted baseline credit assessment, in line with Moody's standard notching guidance for subordinated debt with loss triggered at the point of non-viability on a contractual basis.
The extra notch relative to BBL's "plain vanilla" (Basel 2) subordinated debt, issued from its Hong Kong branch, rated at Baa2 reflects the inherent uncertainty regarding the timing of government's financial support that in turn will trigger such a non-viability event.
The level of write-down will be determined by BBL, as notified and acknowledged by the relevant authority. Per the terms and conditions of the securities, the amount of write-down will have to be sufficient to enable BBL to continue its business or in an amount required by the relevant authority.
The Tier 2 subordinated notes issued under this programme will, upon the occurrence of the bankruptcy or liquidation of BBL, be senior to all classes of equity securities of BBL, including holders of preference shares, if any, Tier 1 capital securities of BBL, as well as liabilities of BBL that by their contractual obligation or operation of law rank junior to the Tier 2 subordinated notes. The Tier 2 subordinated notes will be junior to all depositors and senior creditors of BBL (other than those claims that are expressed to rank equal to or junior to the claims under the Tier 2 subordinated notes).






