RAM reaffirms AMMB’s ratings, revises outlook to positive from stable

Published on 25 January 2013

RAM Ratings has reaffirmed AMMB Holdings Berhad’s (“AMMB” or “the Company”) respective long- and short-term corporate credit ratings at A1 and P1. We have also reaffirmed the respective A1 and A2 ratings of the senior and subordinated medium-term notes (“MTNs”) issued under AMMB’s MTN Programme of up to RM2 billion. Concurrently, the outlook on all the long-term ratings has been revised to positive from stable, in line with the positive outlook on its key banking subsidiaries.

As a non-operating investment-holding company, AMMB’s earnings depend on dividends received from its subsidiaries to service its financial obligations. In this regard, AMMB’s ratings reflect the credit strength of its key banking subsidiaries, i.e. AmBank (M) Berhad (“AmBank”), AmIslamic Bank Berhad (“AmIslamic”) and AmInvestment Bank Berhad (“AmInvestment”) - all rated AA3/Positive/P1 - apart from its own company-level credit metrics. The 1-notch differential between AMMB’s long-term corporate credit rating and the long-term ratings of its key subsidiaries indicates the Company’s structural subordination given its lower priority as a shareholder compared to the direct creditors of its key subsidiaries; it also incorporates AMMB’s sound stand-alone credit fundamentals and comfortable financial leverage ratios.

For more details, please refer to RAM’s press releases on AmBank, AmIslamic and AmInvestment dated 25 January 2013.

Media contact

Kwan Ji-Ling

(603) 7628 1115

jiling@ram.com.my