Bank of Asia Affirmed; Off S&PWatch Developing.MELBOURNE--(BUSINESS WIRE)--Standard & Poor's CreditWire 10/19/98--Standard & Poor's today affirmed af·firm v. af·firmed, af·firm·ing, af·firms v.tr. 1. To declare positively or firmly; maintain to be true. 2. To support or uphold the validity of; confirm. v.intr. its double-'B' long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. and 'B' short-term ratings on Bank of Asia Public Co. Ltd., and removed the ratings from CreditWatch with developing implications, where they were placed on March 20, 1998. A stable rating outlook has been assigned as·sign tr.v. as·signed, as·sign·ing, as·signs 1. To set apart for a particular purpose; designate: assigned a day for the inspection. 2. . The rating action follows ABN-AMRO Bank N.V.'s (double-'A'/Stable/'A-1+') acquisition of 75% of Bank of Asia shares in September 1998. Although Bank of Asia's stand-alone financial profile has deteriorated significantly since the ratings were last affirmed at double-'B'/'B', the ratings affirmation A solemn and formal declaration of the truth of a statement, such as an Affidavit or the actual or prospective testimony of a witness or a party that takes the place of an oath. An affirmation is also used when a person cannot take an oath because of religious convictions. recognizes the tangible and intangible benefits resulting from the bank's acquisition by ABN-AMRO. ABN-AMRO's 75% share acquisition has stabilized sta·bi·lize v. sta·bi·lized, sta·bi·liz·ing, sta·bi·liz·es v.tr. 1. To make stable or steadfast. 2. Bank of Asia's liquidity and funding position and satisfied imminent recapitalization Recapitalization Restructuring a company's debt and equity mixture often with the aim of making a company's capital structure more stable. Notes: Companies often want to diversify their debt-to-equity ratio to improve liquidity. needs. Standard & Poor's believes, however, that despite ABN-AMRO's commitment to the provision of additional capital in the year 2000 as part of the second tranche Tranche One of several related securities offered at the same time. Tranches from the same offering usually have different risk, reward, and/or maturity characteristics. tranche A class of bonds. of shares to be issued, Bank of Asia will be likely to need still more capital to comply with provisioning standards on growing asset-quality problems and to support future business. Despite ABN-AMRO's majority ownership and control of the board, Bank of Asia will retain its domestic identity within the ABN-AMRO group. Bank of Asia will assume all transactional banking functions for the ABN-AMRO group in Thailand. Large multinational corporate customers of ABN-AMRO will continue to be serviced by the ABN-AMRO branch in Thailand. Also, Bank of Asia's management team has been retained following the acquisition, although selected ABN-AMRO executives have been placed within the bank's management structure. ABN-AMRO currently is upgrading Bank of Asia's systems, policies, and procedures to bring them in line with those of the ABN-AMRO group, while the majority ownership by ABN-AMRO has given Bank of Asia access to ABN-AMRO's global network and wide range of resources. While Bank of Asia will encounter the same difficult operating conditions as those experienced by other Thai commercial banks, the stable rating outlook recognizes that the bank now has the financial flexibility to deal with asset-quality problems and capital needs, leaving it better placed to concentrate on business issues compared with its peers, who remain preoccupied pre·oc·cu·pied adj. 1. a. Absorbed in thought; engrossed. b. Excessively concerned with something; distracted. 2. Formerly or already occupied. 3. with addressing asset-quality and recapitalization needs, Standard & Poor's said. --- CreditWire |
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