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Banks (Finance)

Moody's Assigns A3 Rating to Affin Bank Berhad's USD2 Billion EMTN Programme

Strategic Insights

— 1 min read

Affin Bank Berhad, a Malaysian bank, has successfully launched a USD2 billion euro medium-term note (EMTN) programme, with Moody's Investors Service assigning a (P)A3 long-term foreign currency senior unsecured rating to the programme. The rating reflects the bank's good standalone creditworthiness, supported by its baa3 Baseline Credit Assessment (BCA) and three notches of uplift due to its expected public support from the State of Sarawak. The bank's profitability, funding, and liquidity are considered relative weaknesses for its credit profile.

Key Takeaways:

  • Moody's has assigned a (P)A3 long-term foreign currency senior unsecured rating to Affin Bank Berhad's USD2 billion EMTN programme, with a stable outlook.
  • The rating is based on the bank's A3 issuer rating, which reflects its good standalone creditworthiness and expected public support from the State of Sarawak.
  • The bank's BCA is supported by its good asset quality and capital adequacy, but its profitability, funding, and liquidity are considered relative weaknesses.
  • The debt ratings could be upgraded if the bank's issuer rating is upgraded, which is unlikely due to the issuer rating being at the same level as the ratings of the State of Sarawak and the Government of Malaysia.
  • The debt ratings could be downgraded if the bank's issuer rating is downgraded, driven by a material deterioration in asset risk, lower profitability, a reduction of the capital ratio, or a drop in the liquidity ratio.
  • A weakening of strategic ties between the bank and the State of Sarawak could also be negative for the bank's ratings.
  • The bank is headquartered in Kuala Lumpur and reported consolidated assets of MYR111.8 billion ($26.6 billion) as of year-end 2024.

Statistics:

  • (P)A3 long-term foreign currency senior unsecured rating assigned to Affin Bank Berhad's USD2 billion EMTN programme.
  • Stable outlook on the proposed senior unsecured notes to be issued under the EMTN programme.
  • A3 rating assigned to the proposed senior unsecured notes to be issued under the EMTN programme.
  • MYR111.8 billion ($26.6 billion) in consolidated assets as of year-end 2024.

Sources:

  • [Moody's Investors Service, Moody's Ratings, 2024]
  • [Moody's Investors Service, Banks published in November 2024 and available at https://ratings.moodys.com/rmc-documents/432741]

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