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TEXT-Fitch Rates Krung Thai Bank's Subordinated Debentures 'AA(tha)'

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(The following was released by the rating agency)

BANGKOK/SINGAPORE, October 12 (Fitch) Fitch Ratings(Thailand) has assigned Krung Thai Bank Public Company Limited's(KTB; 'AA+(tha)'/Outlook Stable) upcoming unsecured subordinateddebentures of up to THB15bn, with an option to issue a furtheramount of up to THB10bn, a National Long-Term rating of'AA(tha)'.

The debentures will have a maturity of 10 years but will becallable after five years. The proceeds will be used tostrengthen the bank's Tier 2 capital and refinance its maturingsubordinated debentures.

KTB's rating is based on Fitch's expectation of statesupport for the bank in case of need. This based on the bank'sstrong linkages with the government through the latter'sownership, control and evidence of support. The bank's largesize and systemic importance also make government support likelyin times of distress. A change in Thailand' ratings could affectKTB's Long- and Short-Term ratings.

The rating of KTB's subordinated debentures, which is onenotch below the bank's issuer rating, takes into account Fitch'sview that state support could be extended to these debtinstruments.

KTB is Thailand's second-largest commercial bank byconsolidated assets with an 18% market share at end-June 2012.Its major shareholder, with a 55% stake, is FinancialInstitutions Development Fund, a unit under the Bank ofThailand.

Keywords: MARKETS RATINGS KRUNGTHAIBANK