OREANDA-NEWS. Fitch Ratings (Thailand) Limited has today revised the Outlook for Bangkok Mass Transit System Public Company Limited's (BTSC) guaranteed debentures due on 21 August 2016 to Stable from Negative. Fitch has affirmed the National Long-Term Rating of the guaranteed debentures at 'AAA(tha)'.

The Outlook revision follows the similar revision in the Outlook of the debentures' guarantor, Bank of Ayudhya Public Company Limited (BAY), on 2 August 2016 (see Fitch Upgrades National Ratings of 9 Thai Financial Institutions), which was part of the reassessment of the Thai national ratings scale and the relative position of entities, including BAY, on the national ratings scale. The change in Outlook on BAY reflects Fitch's view that there is a low risk of any widening gap between its credit profile and that of the Thai sovereign in the near term. A downgrade of BAY's parent, the Bank of Tokyo-Mitsubishi UFJ, Ltd. (BTMU; A/Negative), would not automatically lead to a downgrade of BAY's National Long-Term Rating, assuming no change in the sovereign credit profile.

KEY RATING DRIVERS

Guarantee from BAY: The ratings of the debentures are fully based on an unconditional and irrevocable guarantee of principal and interest of the debentures provided by BAY. As a result, the debentures are rated at the same level as the guarantor, BAY.

RATING SENSITIVITIES

Negative: Future developments that may, individually or collectively, lead to negative rating action include:

- Negative rating action on BAY

Positive: Future developments that may, individually or collectively, lead to positive rating action include:

- Positive rating action on BAY

For the ratings of BAY, the following sensitivities were outlined by Fitch in its Rating Action Commentary of 2 August 2016:

The National Ratings of BAY would be impacted by any changes in its parent group's ability to provide support. Any rating changes at BTMU would likely lead to similar changes at BAY, (although there is no upside for BAY as it is already at the top end of the scale). Any material weakening in BTMU's propensity to support the Thai subsidiary could also lead to a change in the National Ratings, although Fitch does not view this as likely in the medium term.