YSAFYouth Service Action Fund (project grant; Youth Service America)
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YSAF's IDR is credit linked to that of YFHC and notched one level below, reflecting Fitch's view of a high probability of support from the parent due to its strategic importance to the group.
The rating on the senior unsecured notes issued by YSAF is in line with the company's Long-Term Issuer Default Rating (IDR) of 'BBB', in accordance with Fitch's criteria.
Any changes to the rating on the notes issued by YSAF will be directly correlated with changes in the company's IDR, which will in turn reflect any shifts in the perceived propensity or ability of YFHC to provide timely support or changes to YFHC's ratings.
A rating downgrade for YSAF could be triggered by weakened linkage between the Yuanta group and YSAF, which could result from a material reduction of the subsidiary's role in supporting the group's strategy in building up a meaningful regional securities franchise or a significant dilution of the Yuanta group's stake in the company.
YSAF performs a specialised role in the group as the parent uses it as a vehicle to control its overseas securities operations.
The Stable Outlook reflects our expectation that YSAF's strategic importance to the group and the high probability of receiving extraordinary support from the parent will remain unchanged in the medium term.
The proposed notes' 'BBB(EXP)' expected rating is aligned with YSAF's Long-Term IDR of 'BBB', in accordance with Fitch's criteria.
Any changes to YFHC's ratings will affect the ratings on YSAF on the same magnitude.