Moody's Affirms A3 Of Exim Bank Of Malaysia, Raises Baseline Credit Assessment

SINGAPORE, June 25 (Bernama) -- Moody's Investors Service has affirmed the A3 foreign currency senior unsecured debt and issuer ratings of Export-Import Bank of Malaysia Bhd (MEXIM), as well as its (P)A3 senior unsecured medium term note (MTN) programme rating.

Source from (Bernama): http://www.bernama.com/bernama/v7/bu/newsbusiness.php?id=958843
Published: Jun 26, 2013

Source from (The Star Online): http://www.thestar.com.my/Business/Business-News/2013/06/26/Moodys-affirms-Exim-Bank-ratings.aspx
Published: Jun 26, 2013

In addition, it has revised the bank's baseline credit assessment (BCA) to ba3 from b1 following improvements in MEXIM's standalone credit profile.

The outlook on all MEXIM's ratings remains stable.

MEXIM's A3 senior unsecured rating is driven by its intrinsic credit strength, as reflected by its BCA of ba3, and six notches of uplift stemming from Moody's support assumptions.

At A3, MEXIM's senior unsecured debt rating is in line with the A3 rating for the government of Malaysia.

It also reflects its government ownership, its important policy role in providing financial services to Malaysian trade-oriented companies and cross-border businesses for which there is no or limited private-sector alternative offering, and Malaysia's history of lending support to government-related institutions and banks.

Furthermore, although explicit support is not mandated, the bank's receipt of guarantees provided on its borrowings in 1999, liquidity support in 2007, and recapitalisation through a loan-to-equity conversion in 2008 are tangible evidence of support in the past.

This track record of support reinforces Moody's view that the bank will continue to benefit from government assistance, if needed.

Moody's said the upward revision of MEXIM's BCA to ba3 from b1 reflects the steady improvements in the bank's asset quality and liquidity over the past three years, which reflect in turn its improved risk management culture and practices since an internal re-organisation and transformation in 2008.

Although the bank's capital level has declined with business growth, Mooody's said the development is in line with its expectations.

At end-2012, its Tier 1 capital ratio was 41.3 per cent.

Moody's expects its capitalisation to remain sufficient to withstand shocks at its current rating level.

The stable ratings outlook reflects Moody's expectations that the bank's overall credit fundamentals will remain stable, underpinned by its improved risk management capabilities, in turn supporting its business growth and asset quality.

-- BERNAMA