KUALA LUMPUR: AMMB Holdings Bhd's (AmBank Group) private placement is credit positive as the exercise will partially address its capital needs, Moody's Investors Services said.
AmBank Group announced on April 5 that it had successfully undertaken a private placement, which was oversubscribed.
The group will raise RM825 million (US$200 million) through the issuance of 300 million shares, or around 10 per cent of its share capital, at RM.75 each.
"This is credit positive for AmBank Group and its main operating subsidiary AmBank (M) Berhad (AmBank, A3 negative, baa21 ) because the capital raised will partially offset the reduction in capital as a result of its recent 1Malaysia Development Bhd (1MDB) settlement," Moody's said in a statement today.
The rating agency added that most of the proceeds would strengthen AmBank's capital.
"More important, the private placement is evidence of AmBank Group's commitment to restore its capital to presettlement levels," Moody's said.
AmBank had agreed to pay RM2.83 billion to the giver to settle all outstanding claims and actions in relation to its involvement in the 1MDB corruption scandal.