SMTB Thai senior debentures win Fitch's 'AAA(tha)' rating
Sumitomo Mitsui Trust Bank (Thai) is preparing to issue new senior unsecured debentures under its existing medium-term note program in Thailand. The planned baht-denominated notes carry the same top national rating as the bank itself, reflecting expectations of support from its Japanese parent and the instruments' unsubordinated status.
Highlights
- Fitch Ratings assigns 'AAA(tha)' National Long-Term Rating to Sumitomo Mitsui Trust Bank (Thai) Public Company Limited's upcoming senior unsecured debentures and MTN program.
- The 'AAA(tha)' rating reflects SMTB Thai's status as a wholly owned subsidiary of Sumitomo Mitsui Trust Bank, Limited (A-/Stable), with strong management and operational integration.
- Fitch states a downgrade of SMTB Thai's National Long-Term Rating would trigger a debenture downgrade, with no potential for rating upside as it is already at the maximum.
Debenture rating under MTN program
As reported by Fitch Ratings, Sumitomo Mitsui Trust Bank (Thai) Public Company Limited's upcoming senior unsecured debentures are assigned a National Long-Term Rating of 'AAA(tha)'. The notes are to be issued under the bank's existing medium-term note program, which Fitch also rates at 'AAA(tha)'.The baht-denominated debentures are rated at the same level as SMTB Thai's National Long-Term Rating because they represent unsubordinated and unsecured obligations of the bank. Fitch says this treatment is consistent with its bank rating criteria for this class of debt.
Parent support anchors top rating
SMTB Thai's National Long-Term Rating is driven by expectations of shareholder support from its Japan-based parent, Sumitomo Mitsui Trust Bank, Limited, which is rated A-/Stable. Fitch says SMTB Thai is wholly owned by SMTB and that the two entities maintain high levels of management and operational integration.The agency adds that the rating on the senior unsecured debentures would be downgraded if SMTB Thai's National Long-Term Rating were downgraded. It also says there is no upside for the debenture rating because it already sits at the highest level on the national scale.
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