Fitch assigns BBB+ to Maybank's proposed debt notes (1155)

KUALA LUMPUR: Fitch Ratings assigned an expected rating of 'BBB+(EXP)' to Malayan Banking Bhd's proposed US dollar-denominated subordinated notes.
It said on Thursday the notes would be issued under Maybank's
US$5bil multicurrency medium-term note programme. The final rating is
subject to the receipt of final documentation conforming to information
already received.
"The notes are rated one notch below Maybank's
'a-' Viability Rating to reflect their subordinated status and the
absence of any going-concern loss-absorption mechanism. This is in
accordance with Fitch's criteria on rating bank regulatory capital and
similar securities," it said.
Fitch said the subordinated notes
will represent direct, subordinated and unsecured obligations of
Maybank, and will rank equally with the bank's other Lower Tier 2
capital securities.
The ratings agency said the subordinated
notes will rank below claims by Maybank's depositors and senior
creditors, but will rank senior to holders of the bank's share capital
and Tier 1 capital securities.
Fitch said the proceeds would be
used for Maybank's general corporate purposes and to augment its Tier 2
capital. The notes were expected to qualify as Lower Tier 2 capital as
per the Bank Negara Malaysia's guidelines and be eligible for Basel III transitional treatment.
Meanwhile, Standard & Poor's
Ratings Services assigned its 'BBB+' long-term issue rating to
Maybank's lower Tier-2 subordinated notes under the US$5 billion
multicurrency medium-term notes.
"The one-notch difference
between the issue rating and the issuer credit rating reflects the
subordinated but interest-non-deferral nature of the notes," said
S&P.