KUALA LUMPUR- Press conference by Maybank on group's financial results, 51st Floor, Menara Maybank, 100, Jalan Tun Perak, Kuala Lumpur at 1200 (0400 GMT) KUALA LUMPUR- Press conference on CIMB Group Holdings Bhd's financial results, 31st Floor, Tun Abdul Razak Hussein Room, Menara CIMB, Jalan Stesen Sentral 2, Kuala Lumpur Sentral, Kuala Lumpur at 1630 (0830 GMT)
KUALA LUMPUR: Moody's Investors Service has affirmed Malayan Bankign Bhd's foreign currency programme and multi-currency medium term notes.
The international ratings agency said on Friday it has affirmed Maybank's (P)A3 senior unsecured MTN rating and assigned a (P)Baa2 subordinate MTN rating
Moody's has also assigned its (P)Baa2 foreign currency subordinated MTN rating to the program's subordinated tranches.
“The same rating actions were implemented for Maybank's Hong Kong and Singapore branches. The outlook is stable,” it said.
Moody's said in 2012, Maybank launched its US$5bil MTN programme, and has now updated this programme by increasing the maximum size to US$15bill. It had also incorporated the terms and conditions for the issuance of subordinated notes with contractual loss absorption at the point of non-viability into the offering circular.
The notes under the program can be issued by Maybank or its Hong Kong or Singapore or any other branches.
It said the affirmed (P)A3 rating of the senior unsecured obligations under the MTN programme was in line with Maybank's A3 foreign currency senior unsecured debt rating.
The senior notes under the programme represent direct, senior, unsubordinated and unsecured obligations of Maybank. As such, they will rank pari passu with the bank's existing and future unsecured and unsubordinated obligations.
On the subordinated MTN, it said the (P)Baa2 rating was two notches below Maybank's a3 adjusted
baseline credit assessment (adjusted BCA), in line with Moody's standard notching guidance for subordinated debt, with loss triggered at the point of non-viability on a contractual basis.
“The extra notch relative to 'plain vanilla' (Basel 2) subordinated debt with normal loss severity
reflects the potential uncertainty associated with the timing of loss absorption, given that Bank Negara Malaysia -- the country's banking regulator -- has not defined the point at which it would deem the bank to be non-viable,” it pointed out.
Under the programme's terms, the principal on these notes would be written down, partially or in full, in the event that BNM and the Malaysian Deposit Insurance Corporation - notify Maybank that without such write-off the bank would become non-viable, or if they decide to make a public sector injection of capital without which the bank would become non-viable.
The authorities maintain the discretion to determine the point of non-viability for banking institutions in Malaysia.
This will allow future subordinated debt draw-downs to be considered as Tier 2 capital as per Capital Adequacy Framework (Capital Components) issued by BNM on Oct 13, 2015.
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