TRIS Rating has affirmed the company rating of Ayudhya Capital Auto Lease (AYCAL) and the ratings for its outstanding senior unsecured debentures at “AA” with a “stable” outlook.
At the same time, TRIS assigned a rating on AYCAL’s proposed issue of up to Bt2 billion in senior unsecured debentures at “AA”.
The proceeds from the new debentures will be used for loan repayment.
The ratings reflect the company’s market position as the leading originator of motorcycle hire-purchase loans, strong capital base and rigorous risk management system.
The ratings also take into consideration the business support and financial support AYCAL receives from Bank of Ayudhya PLC (BAY), rated “AAA” with a “stable” outlook by TRIS.
The ratings of AYCAL are enhanced by its stand-alone rating because TRIS believes the company is a strategically important subsidiary of BAY.
However, the strengths are weighed down by concerns over intense competition and potential rise in credit risk.
The company’s target customers are especially susceptible to economic downturns. In addition, there remains a significant amount of uncertainty surrounding the effect that the forthcoming regulations will have on the interest rates, fees, and market conduct of all non-bank financial institutions.