Fitch affirms China Bills Finance

Fitch Ratings said it affirmed China Bills Finance Corp.'s long-term foreign-currency issuer default rating at BBB, short-term foreign-currency issuer default rating at F3, national long-term rating at A+(twn) and national short-term rating at F1(twn).

The affirmation follows its decision to reduce about NT$3.36 billion of its paid-in capital, pending shareholders and regulators' approval.

The outlook remains stable.

Fitch said it understands the capital reduction is meant to boost its capital efficiency and bolster shareholders' return. The act also may imply the management's confidence in the company's financial flexibility, the agency said.

Nevertheless, the agency said it considers that such de-capitalization would effectively reduce the company's excess capital and hence weaken its capacity to absorb potential losses, particularly in the current challenging economic environment, Fitch said.

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