Fitch Rates Siam Commercial Bank's USD Senior Notes 'BBB+(EXP)'

          Fitch Ratings has assigned an expected 'BBB+(EXP)' rating to The Siam Commercial Bank Public Company Limited's (SCB; BBB+/Stable/bbb+) proposed US dollar senior unsecured notes, which will be issued under the USD3.5 billion medium-term note (MTN) programme by the bank's Cayman Islands branch. 
          The notes will be issued with tenure of five and/or Fitch RatingsSiam Commercial Bank years. SCB plans to use the issuance for general corporate and funding purposes. 
          The final rating is subject to the receipt of final documentation conforming to information already received. 
          Fitch rated SCB's USD3.5 billion MTN programme at 'BBB+' as senior notes under the MTN programme would represent direct, unconditional, unsecured, and unsubordinated obligations of the bank. Notes issued under the programme may be in any currency other than the Thai baht.

          KEY RATING DRIVERS 
          The senior notes are rated at the same level as SCB's Long-Term Foreign-Currency Issuer Default Rating (IDR) of 'BBB+' as they will represent the bank's unsecured and unsubordinated obligations. 

          RATING SENSITIVITIES
          The rating of the senior unsecured notes would be directly affected by any changes in SCB's Long-Term Foreign-Currency IDR, which in turn is driven by its Viability Rating (VR) of 'bbb+'. 
          There is unlikely to be upside to SCB's VR in the near term as it is already at the same level as the Thai sovereign's Long-Term Foreign-Currency IDR (BBB+/Stable), and the bank has a substantial exposure to sovereign bonds. A significant and sustained deterioration beyond Fitch's expectations in either asset quality or profitability (including a much higher risk appetite, which could raise the prospects for future deterioration) without adequate buffers in terms of loan-loss reserves and capitalisation could lead to a negative rating action on the VR.
          For more details on the rating drivers and sensitivities for SCB, please see the rating action commentary, dated en May enSiam Commercial BankFitch Ratings8.