Fitch Ratings has revised the Outlook on EASY BUY Public Company Limited (EB) to Negative from Stable. At the same time, Fitch has affirmed EB's National Long-Term Rating of 'AA(tha)' and National Short-Term Rating of 'F1+(tha)'.
The revised Outlook follows similar rating action on the Long-Term Issuer Default Rating (IDR) of EB's parent, ACOM CO., LTD. (BBB+/Negative) on 4 August 2020; see, Fitch Revises Outlook on MUFG Group and Affiliates to Negative; Affirms Ratings, at www.fitchratings.com/site/pr/10131407
KEY RATING DRIVERS
EB's National Long-Term Rating is driven by Fitch's belief that the company is a strategically important subsidiary of ACOM and would receive extraordinary support from its parent. ACOM owns 71% of EB, and there is a high level of management control and operational linkages between the two entities.
Fitch has equalised EB's senior debt ratings with its National Long-Term Rating in accordance with Fitch criteria.
Factors that could, individually or collectively, lead to positive rating action/upgrade:
A revision of ACOM's Long-Term IDR to Stable would be likely to result in similar rating action on EB's National Long-Term Rating.
A significant increase in EB's strategic importance to the group, such as in terms of its contribution to and role within the group, may also lead to an upgrade, though this would be contingent on Fitch's assessment of EB's relative strengths on the Thai national rating scale. An upgrade of EB's National Long-Term Rating would result in similar rating action on its long-term senior debt rating.
Factors that could, individually or collectively, lead to negative rating action/downgrade:
A reduced ability by ACOM to support EB, as indicated by a downgrade of ACOM's Long-Term IDR, would be likely to lead to a downgrade of the subsidiary's National Long-Term Rating.
EB's ratings may also be downgraded if Fitch believes that the parent's propensity to support EB is reduced. This may be indicated by a substantial reduction in the level of management control, operational integration, and shareholding, such as to below 50%, with the presence of significant minority shareholders. However, Fitch does not expect this to occur in the near term.
A downgrade of EB's National Long-Term Rating would result in similar rating action on its long-term senior debt rating.
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING
The principal sources of information used in the analysis are described in the Applicable Criteria.