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Fitch Revises Outlook on Bangkok Commercial Asset Management to Negative; Withdraws Ratings

Fitch Ratings (Thailand) has revised the Outlook on Bangkok Commercial Asset Management Public Company Limited's (BAM) National Long- Term Rating to Negative from Stable. At the same time, Fitch has affirmed and withdrawn BAM's National Long-Term Rating of 'BBB+(tha)' and National Short-Term Rating of 'F2(tha)'. A full list of rating actions is below.

The Outlook revision reflects the increasingly challenging operating environment stemming from the economic impact of the coronavirus pandemic, with Fitch forecasting Thailand's GDP to contract by 5.5% in 2020. In light of this backdrop, we expect under Fitch's base case that BAM's debts collections and EBITDA will be negatively affected during 2020. This would increase downside risks to the company's already high leverage, as indicated by a higher debt/EBITDA ratio of about 13.7x at end-1Q20 (annualised) than the 8.0x-9.0x range during the past four years. We expect there will be an improvement in 2021, but BAM may be challenged to bring it below 10.0x in that time frame.

The ratings were withdrawn for commercial reasons.

KEY RATING DRIVERS

The downside risks have increased. However, the affirmation of BAM's national ratings is based on Fitch's assessment that overall credit profile has not changed significantly since our previous rating action on 19 February 2020, available at www.fitchratings.com/site/pr/10110857.

RATING SENSITIVITIES

Rating sensitivities for the National Ratings are no longer relevant as the ratings have been withdrawn.

BEST/WORST CASE RATING SCENARIO

International scale credit ratings of Financial Institutions and Covered Bond issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. For more information about the methodology used to determine sector-specific best- and worst-case scenario credit ratings, visit [https://www.fitchratings.com/site/re/10111579]

REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING

The principal sources of information used in the analysis are described in the Applicable

Additional information is available on www.fitchratings.com