Reuters logo
Fitch Rates ICBCIL Finance's USD Notes Final 'A'
April 5, 2017 / 6:32 AM / 8 months ago

Fitch Rates ICBCIL Finance's USD Notes Final 'A'

(The following statement was released by the rating agency) TAIPEI, April 05 (Fitch) Fitch Ratings has assigned ICBCIL Finance Co. Ltd.'s (A/Stable) US dollar senior unsecured notes final 'A' ratings. ICBCIL Finance functions as the exclusive treasury platform for the offshore leasing operations of ICBC Financial Leasing Co. Ltd. (ICBC Leasing; A/Stable). The rated notes comprise USD1.15 billion of 3% notes due 2020 and USD850 million of 3.375% notes due 2022. The notes will be issued under ICBCIL Finance's existing medium-term note (MTN) programme and will have the benefit of a keepwell deed and deed of asset purchase undertaking provided by ICBC Leasing. The notes will be listed on the Hong Kong Stock Exchange and the proceeds of the notes will be used to fund the acquisition of assets in the ordinary course of trading and other general corporate purposes. The final ratings are in line with the expected rating assigned on 28 March 2017 and follow the receipt of documents conforming to information previously received. ICBCIL Finance's USD10 billion MTN programme was first rated by Fitch on 7 October 2015 and subsequently affirmed on 23 February 2017. The size of the programme was increased to USD10 billion on 28 March 2017 from USD5 billion to support the company's asset expansion. ICBC Leasing is the wholly owned leasing arm of Industrial and Commercial Bank of China (ICBC; A/Stable). The company provides aviation, shipping, and equipment leasing services and is the largest lessor in China with total domestic assets of CNY165 billion as of end-2016. ICBC is the largest of China's state-owned commercial banks and the largest bank in the world by assets. KEY RATING DRIVERS The rating on the notes issued by ICBCIL Finance primarily reflects our assessment of an extremely high probability of support from ICBC Leasing to ICBCIL Finance. Although ICBCIL Finance is owned by ICBC and not by ICBC Leasing, it is highly integrated into ICBC Leasing's operations and ICBC has authorised and mandated ICBC Leasing to exercise full managerial and operational control over ICBCIL Finance. The keepwell deed commits ICBC Leasing to ensure that the issuer maintains sufficient levels of equity and liquidity to service its obligations to offshore bondholders at all times. Under the deed of asset purchase undertaking, upon the occurrence of a triggering event, ICBC Leasing is required to purchase ICBCIL Finance's assets at a price high enough to meet any outstanding debt obligations under the note issuance. The triggering event refers to the situation in which ICBCIL Finance does not have sufficient liquidity to meet its payment obligations or an event of default. The deed of asset purchase undertaking serves as an important mechanism to allow ICBC Leasing to provide foreign-currency liquidity to ICBCIL Finance in a timely manner. ICBC Leasing does not require approval from the State Administration of Foreign Exchange for these foreign-currency transfers because buying assets for leasing purposes is a part of ICBC Leasing's operating activities sanctioned by the relevant authorities, including the China Banking Regulatory Commission. There could be practical difficulties in enforcing the keepwell deed and deed of asset purchase undertaking, which is not as strong as a guarantee. Nevertheless, the agreements at the parent level suggest a very strong propensity for ICBC Leasing to support ICBCIL Finance, if required. RATING SENSITIVITIES Any changes to ratings on the notes issued under the programme will be directly correlated to any material change in the willingness or ability of ICBC Leasing to support ICBCIL Finance, if required. Likewise, any material change in the perceived willingness or ability of China's government to support ICBC and ICBC Leasing in a full and timely manner would affect the ratings on the issuer and its notes. Should the keepwell deed and deed of asset purchase undertaking no longer be effective, then the rating on the programme could be downgraded. Contact: Primary Analyst Katie Chen Director +886 2 8175 7614 Fitch Australia Pty Ltd, Taiwan Branch Suite 1306, 13F, 205, Tun Hwa N. Rd., Taipei Secondary Analyst Shirley Hsu Associate Director +886 2 8175 7606 Committee Chairperson Tim Roche Senior Director +61 2 8256 0310 Date of Relevant Rating Committee: 22 February 2017 Media Relations: Wai-Lun Wan, Hong Kong, Tel: +852 2263 9935, Email: wailun.wan@fitchratings.com. Additional information is available on www.fitchratings.com Applicable Criteria Global Non-Bank Financial Institutions Rating Criteria -- Effective July 15, 2016 – March 10, 2017 (pub. 15 Jul 2016) here Additional Disclosures Dodd-Frank Rating Information Disclosure Form here _id=1021672 Solicitation Status here Endorsement Policy here ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEB SITE AT <a href="https://www.fitchratings.com">WWW.FITCHRATINGS.COM.. PUBLISHED RATINGS, CRITERIA, AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE, AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE CODE OF CONDUCT SECTION OF THIS SITE. DIRECTORS AND SHAREHOLDERS RELEVANT INTERESTS ARE AVAILABLE AT <a href="https://www.fitchratings.com/site/regulatory">HTTPS://WWW. FITCHRATINGS.COM /SITE/REGULATORY. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE. Copyright © 2017 by Fitch Ratings, Inc., Fitch Ratings Ltd. and its subsidiaries. 33 Whitehall Street, NY, NY 10004. Telephone: 1-800-753-4824, (212) 908-0500. Fax: (212) 480-4435. Reproduction or retransmission in whole or in part is prohibited except by permission. All rights reserved. In issuing and maintaining its ratings and in making other reports (including forecast information), Fitch relies on factual information it receives from issuers and underwriters and from other sources Fitch believes to be credible. Fitch conducts a reasonable investigation of the factual information relied upon by it in accordance with its ratings methodology, and obtains reasonable verification of that information from independent sources, to the extent such sources are available for a given security or in a given jurisdiction. The manner of Fitch’s factual investigation and the scope of the third-party verification it obtains will vary depending on the nature of the rated security and its issuer, the requirements and practices in the jurisdiction in which the rated security is offered and sold and/or the issuer is located, the availability and nature of relevant public information, access to the management of the issuer and its advisers, the availability of pre-existing third-party verifications such as audit reports, agreed-upon procedures letters, appraisals, actuarial reports, engineering reports, legal opinions and other reports provided by third parties, the availability of independent and competent third- party verification sources with respect to the particular security or in the particular jurisdiction of the issuer, and a variety of other factors. Users of Fitch’s ratings and reports should understand that neither an enhanced factual investigation nor any third-party verification can ensure that all of the information Fitch relies on in connection with a rating or a report will be accurate and complete. Ultimately, the issuer and its advisers are responsible for the accuracy of the information they provide to Fitch and to the market in offering documents and other reports. In issuing its ratings and its reports, Fitch must rely on the work of experts, including independent auditors with respect to financial statements and attorneys with respect to legal and tax matters. Further, ratings and forecasts of financial and other information are inherently forward-looking and embody assumptions and predictions about future events that by their nature cannot be verified as facts. As a result, despite any verification of current facts, ratings and forecasts can be affected by future events or conditions that were not anticipated at the time a rating or forecast was issued or affirmed. The information in this report is provided “as is” without any representation or warranty of any kind, and Fitch does not represent or warrant that the report or any of its contents will meet any of the requirements of a recipient of the report. A Fitch rating is an opinion as to the creditworthiness of a security. This opinion and reports made by Fitch are based on established criteria and methodologies that Fitch is continuously evaluating and updating. Therefore, ratings and reports are the collective work product of Fitch and no individual, or group of individuals, is solely responsible for a rating or a report. The rating does not address the risk of loss due to risks other than credit risk, unless such risk is specifically mentioned. Fitch is not engaged in the offer or sale of any security. All Fitch reports have shared authorship. Individuals identified in a Fitch report were involved in, but are not solely responsible for, the opinions stated therein. The individuals are named for contact purposes only. A report providing a Fitch rating is neither a prospectus nor a substitute for the information assembled, verified and presented to investors by the issuer and its agents in connection with the sale of the securities. Ratings may be changed or withdrawn at any time for any reason in the sole discretion of Fitch. Fitch does not provide investment advice of any sort. Ratings are not a recommendation to buy, sell, or hold any security. Ratings do not comment on the adequacy of market price, the suitability of any security for a particular investor, or the tax-exempt nature or taxability of payments made in respect to any security. Fitch receives fees from issuers, insurers, guarantors, other obligors, and underwriters for rating securities. Such fees generally vary from US$1,000 to US$750,000 (or the applicable currency equivalent) per issue. In certain cases, Fitch will rate all or a number of issues issued by a particular issuer, or insured or guaranteed by a particular insurer or guarantor, for a single annual fee. Such fees are expected to vary from US$10,000 to US$1,500,000 (or the applicable currency equivalent). The assignment, publication, or dissemination of a rating by Fitch shall not constitute a consent by Fitch to use its name as an expert in connection with any registration statement filed under the United States securities laws, the Financial Services and Markets Act of 2000 of the United Kingdom, or the securities laws of any particular jurisdiction. Due to the relative efficiency of electronic publishing and distribution, Fitch research may be available to electronic subscribers up to three days earlier than to print subscribers. For Australia, New Zealand, Taiwan and South Korea only: Fitch Australia Pty Ltd holds an Australian financial services license (AFS license no. 337123) which authorizes it to provide credit ratings to wholesale clients only. Credit ratings information published by Fitch is not intended to be used by persons who are retail clients within the meaning of the Corporations Act 2001

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below