OREANDA-NEWS.  Fitch Ratings (Thailand) Limited has affirmed Bangkok Mass Transit System Public Company Limited's (BTSC) THB1.3bn debentures due in August 2016 that are unconditionally and irrevocably guaranteed by Bank of Ayudhya Public Company Limited (BAY; AAA(tha)/Stable) at 'AAA(tha)'. The Outlook is Stable.

KEY RATING DRIVERS
Guarantee from BAY: The ratings of the debentures are fully based on an unconditional and irrevocable guarantee of principal and interest of the debentures provided by BAY. As a result, the debentures are rated at the same level as the guarantor, BAY.

Mass Transit Operator: Established in 1992, BTSC is the operator of BTS Skytrain - an elevated mass rapid rail transit system in Bangkok. After the company sold the net farebox revenue of BTS Skytrain to BTS Rail Mass Transit Growth Infrastructure Fund in April 2013, BTSC now relies mainly on the operation and maintenance (O&M) service revenue. Previously, BTSC's revenue was mainly sourced from the fare collection of BTS Skytrain.

BTSC also receives revenue from advertising sales through its subsidiary VGI Global Media Public Company Limited, leasing of commercial space at the BTS Skytrain stations, and interest income from excess cash. The company has also been awarded the O&M contracts for BTS extension routes and Bangkok Bus Rapid Transit system.

RATING SENSITIVITIES
Negative: Future developments that may, individually or collectively, lead to negative rating
action include:
- negative rating action on BAY

The debentures are rated at the highest level on Fitch's national rating scale established for Thailand, leaving no further room for positive rating action.

For the ratings of BAY, the following sensitivities were outlined by Fitch in its Rating Action Commentary of 6 November 2015.

BAY's National Long-Term Rating is sensitive to a change in Fitch's assumptions about the ability or propensity of BAY's institutional shareholder, Bank of Tokyo-Mitsubishi UFJ, Ltd. (BTMU) to support BAY. No upside is possible to BAY's National Long-Term Rating as it is already at the highest end on the Thai National scale. There could be downside to BAY's ratings if BTMU is downgraded or if the strategic importance of BAY to BTMU declines (for example, in case of a large reduction in shareholding or a reduction in operational linkages).