RAM Ratings ups MBF Cards' long-term rating of RM600m notes to AA3

KUALA LUMPUR: RAM Rating Services Bhd has upgraded the long-term rating of MBF Cards (Malaysia) Sdn Bhd's RM600mil commercial papers/medium-term notes (CP/MTN) programme (2007/2014), from A2 to AA3.

It said on Tuesday the outlook on the long-term rating was revised to positive from stable. Concurrently, the short-term rating of the debt facility has been reaffirmed at P1.

"The rating upgrade reflects the credit strength of AmBank (M) Bhd (rated AA3/Positive/P1) - the core banking entity of AMMB Holdings Bhd," it said.

AMMB is the new parent of MBF Cards after it acquired the company on Dec 3, 2012. The rating outlook on the CP/MTN programme also followed a similar rating action on AmBank.

RAM Ratings said AmBank invested in MBF Cards to propel its franchise in the credit-card and merchant-acquiring businesses.

The company's credit-card receivables and exposure would be transferred to AmBank by Q3, 2013. During the transition, MBF Cards would be managed as a division of AmBank.

Currently, AmBank and AMMB senior personnel have been appointed to the company's management line-up and board of directors. AmBank has been extending funding to MBF Cards.

RAM has been informed that, subject to regulatory approval, MBF Cards' CP/MTN programme will be cancelled upon the vesting of its credit-card receivables and exposure.

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