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Moody's affirms Thailand's Baa1 rating; outlook stable

Moody's Investors Service today affirmed Thailand's long-term issuer ratings at "Baa1" with a stable outlook on the view that the country's fundamental credit strengths remain largely intact despite the political confrontations.

The military coup and the lingering political uncertainty are not expected to undermine Thailand's credit strengths to a material degree over 12-18 months, it said.

Thailand's short-term, prime-2 commercial paper programme rating, provisional "Baa1" MTN/Shelf issuance rating and "Baa1" Japan bonds/Thai bonds issuance rating were also affirmed.

The key drivers for the sovereign affirmation were the government's unimpaired ability to manage its finances, strong institutional anchors that are unaffected by the military coup and sustained external strength.

Moody's has also affirmed the senior unsecured "Baa1" rating for the Bank of Thailand.

A positive rating outlook or rating upgrade looks highly unlikely at this time, but potentially credit-positive developments would include an improvement in the political climate and a transparent roadmap for reform that clearly outlines the way from military rule towards a stable civilian government.

Factors that could trigger a negative rating outlook or a rating downgrade include an escalation of conflict between the military and protesters resulting in significant and potentially long-lasting effects on tourism or manufacturing, a significant rise in government funding costs related to domestic political uncertainty or a lapse in fiscal discipline, and/or a sharp deterioration of the balance of payments and significant loss of official international reserves.


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