AmBank, AmIslamic ratings unaffected by proposed purchase

RAM Ratings Services did not reflect any impact on AMMB Holdings Bhd's proposed acquisition of AmIslamic from AmBank in the latter two entities' ratings and debt issues.

It said both AmBank and AmIslamic carry AA3/P1 financial institution ratings, with a stable outlook.

AHB announced that it had entered into a sale and purchase agreement with AmBank to acquire AmIslamic. The acquisition cost of about US$440 million will be financed by the proceeds from the redemption of US$188.9 million Exchangeable Bonds, dividend payments from AmBank and internal funds, according to Bernama News Agency.

Nevertheless, AmIslamic is expected to remain closely integrated with AmBank and will continue to leverage on the latter's back-room operations, risk-management system and branches as well as e-channels.

The corporate reorganisation represents part of AHB's capital-management strategy and is expected to be finalised by end-March 2011.

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