OREANDA-NEWS. Fitch Ratings has assigned Bank of China Ltd. (BOC) Taipei branch's CNY-denominated senior unsecured notes an expected Long-Term Rating of 'A(EXP)' and an expected National Long-Term Rating of 'AA+(twn)(EXP)' . The issue size is expected to be CNY3bn in total and it will be issued in late June 2015 in four tranches, with five-year, seven-year, 10-year and 15-year maturities.

The notes will be issued by BOC Taipei branch to Taiwan-based investors under BOC's USD20bn medium-term note (MTN) programme, which was rated 'A'/'F1' by Fitch on 9 December 2013. BOC increased the size of its MTN programme to USD20bn from USD10bn on 18 June 2015 to support its asset expansion.

The proceeds from the notes will be used to support BOC Taipei branch's offshore CNY business and strengthen its CNY funding base. The final rating is contingent upon the receipt of final documents conforming to the information already received.

KEY RATING DRIVERS

In Fitch's view, the Taipei branch is part of the legal entity, BOC. Therefore, the notes to be issued under the MTN programme represent direct, unconditional, unsecured and unsubordinated obligations of BOC, and are rated in line with BOC's Long-Term Issuer Default Rating (IDR) of 'A', which corresponds to its National Long-Term Rating of 'AA+(twn)' . The bank's IDR is underpinned by the agency's expectations of an extremely high probability of support in the event of stress from the Chinese government.

RATING SENSITIVITIES

Any changes to ratings of the notes will be directly correlated to changes in BOC's IDR, which will in turn reflect any shift in the perceived willingness or ability of China's government to support BOC in a full and timely manner.