Fitch Ratings has upgraded JSC TBC Leasing's (TBCL) Long-Term Issuer Default Rating (IDR) to 'BB' from 'BB-' with a Stable Outlook and its Shareholder Support Rating (SSR) to 'bb' from 'bb-'.
TBCL's IDRs are driven by support from TBC Bank. We believe the propensity of the parent to support TBCL is high, reflecting full ownership, common branding, integration, a record of capital and funding support and high reputational risks from a subsidiary default. TBCL's foreign lenders are largely the same international financial institutions (IFIs) and impact investors from which TBC Bank sources a material portion of its own wholesale funding. Fitch believes a failure to support TBCL would significantly damage TBC Bank's reputation with its key lenders, undermining its business model and growth potential.
To support TBCL's growth, TBC Bank has provided capital and funding in recent years. The parent has approved an injection of GEL3.2 million (USD1.3 million) to be disbursed according to TBCL's needs and also provides a contingency funding line up to USD30 million (undrawn at end-2022). TBC Bank provides TBCL letters of support to enable third-party borrowing and also facilitates TBCL's bond placements.
TBCL operates solely in Georgia, where it is the market leader with an 82% share at end-2022. The company mainly provides financial leasing to corporate clients of TBC Bank as well as to SMEs, micro-businesses and individuals. The company accounts for a modest 2% of TBC Bank's assets, but its significance to its product offering has been increasing in recent years.
