Fitch Ratings has affirmed
A full list of rating actions is at the end of the commentary.
KEY RATING DRIVERS
IDRS AND SUPPORT RATING
ICBC Macau's IDRs are equalised with those of
ICBC Macau plays an important role in ICBC's greater
Fitch does not assign a Viability Rating to ICBC Macau as the bank's operations and risks are tightly controlled by ICBC and it benefits significantly from the parent's franchise.
SUBORDINATED DEBT
ICBC Macau's subordinated debt is rated two notches below its IDR to reflect high loss severity relative to senior unsecured debt - per Fitch's criteria. The use of ICBC Macau's support-driven IDR as the anchor rating reflects Fitch's assessment that support from ICBC, and ultimately from the Chinese authorities, would be made available to the notes if needed. The support will neutralise the non-performance risk of the notes, as reflected in the anchor rating, and hence no incremental notching is required. The notes do not have triggers that would result in coupon deferral.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive rating action/upgrade:
IDRS AND SUPPORT RATING
An upgrade of ICBC's IDR could lead to similar positive rating action on ICBC Macau's IDR, provided we believe there is no reduced propensity to support ICBC Macau.
The Support Rating of '1' is the highest Fitch assigns and cannot be upgraded.
SUBORDINATED DEBT
The subordinated notes' rating is sensitive to changes in ICBC Macau's Long-Term IDR, from which it is notched. Therefore, an upgrade of ICBC Macau's Long-Term IDR, which would be led by an upgrade in the parent's IDR, would lead to an upgrade of the subordinated notes' rating.
Factors that could, individually or collectively, lead to negative rating action/downgrade:
IDRS AND SUPPORT RATING
ICBC Macau's Long-Term IDR will be downgraded if there is a downgrade of ICBC's IDR or if Fitch's perception of institutional support from ICBC, and the Chinese sovereign's ability and propensity to support ICBC and its subsidiary, are significantly weakened. Our view of ICBC's propensity to support ICBC Macau could be negatively affected if the
SUBORDINATED DEBT
A downgrade of ICBC Macau's Long-Term IDR would lead to a downgrade of the subordinated notes' rating.
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 '
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 Criteria.
PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS
The ratings of ICBC Macau are driven by our view of the likelihood of support from ICBC.
RATING ACTIONS
ENTITY/DEBT RATING PRIOR
Industrial and Commercial Bank of China (Macau) Limited LT IDR A Affirmed A
ST IDR F1+ Affirmed F1+
Support 1 Affirmed 1
subordinated
LT BBB+ Affirmed BBB+
VIEW ADDITIONAL RATING DETAILS
Additional information is available on www.fitchratings.com
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