RAM Ratings places EON Bank on Rating Watch with a positive outlook

RAM Ratings (6 May 2011): RAM Ratings has placed EON Bank Berhad’s (EON Bank or the Bank) A1/P1 long- and short-term financial institution ratings, on Rating Watch, with a positive outlook. Concurrently, we have also placed the respective A3 and A2 long-term ratings of the Bank’s Innovative Tier-1 Capital Securities Issuance Programme (Tier-1 Capital Securities) of up to RM1 billion and Subordinated Medium-Term Notes (Sub MTN) Issuance Programme of up to RM2 billion on Rating Watch, with a positive outlook.

On 29 April 2011, EON Capital Berhad (EON Capital), announced to Bursa Malaysia that it had on 28 April 2011 accepted the offer made by Hong Leong Bank Berhad (Hong Leong Bank) to acquire the assets and liabilities of EON Capital for approximately RM5.1 billion. EON Bank is the core subsidiary of EON Capital.

The Rating Watch is premised on the proposed acquisition of all the assets and liabilities of EON Capital by Hong Leong Bank. Upon completion of the proposed acquisition, the ratings of EON Bank’s debt facilities will be upgraded to reflect Hong Leong Bank’s credit as the obligations of the former will be assumed by Hong Leong Bank, while EON Bank’s financial institution ratings are likely to be withdrawn. The financial institution ratings of Hong Leong Bank had been reaffirmed at AA1/P1 with a stable outlook on 29 April 2011.

Full detail: http://www.ram.com.my/