Bangkok--18 May--Fitch Ratings
Fitch Ratings has today affirmed the National ratings of all debentures issued by Eternal 4 Special Purpose Vehicle Company Limited (Eternal 4) and the International Local Currency rating of debentures issued by Eternal 5 Special Purpose Vehicle Company Limited (Eternal 5). The agency has also revised the Outlook of Eternal 5's debentures to Stable from Negative. The transactions are securitisations of credit card receivables originated by Aeon Thana Sinsap (Thailand) Public Company Limited (AEONTS; 'BBB+(tha)'/Stable/'F2(tha)'). The rating actions are as listed below: Eternal 4:
THB500m Class A-2 (due October 2014) affirmed at 'AAA(tha)'; Outlook Stable; Loss Severity Rating 'LS-3'; and
THB205m Class B (due October 2014) affirmed at 'AAA(tha)'; Outlook Stable; Loss Severity Rating 'LS-3'.
Eternal 5:
THB2,790m debentures (due May 2015) affirmed at 'A-sf'; Outlook revised to Stable from Negative; Loss Severity Rating 'LS-2'.
The rating affirmations of debentures for both transactions reflect the satisfactory historical performances of their portfolios compared to Fitch's base case assumptions at closing as well as the transactions' strong credit enhancement (CE) levels. The rating affirmations are also further supported by Fitch's expectation of Thailand's moderate economic growth and low unemployment rate in 2011 and 2012. The Outlook revision to Stable for Eternal 5's debentures follows the Outlook revision of Thailand's International Local Currency IDR to Stable from Negative on 12 May 2011. Thailand's International Local Currency IDR acts as a rating cap of Eternal 5's debentures.
"The performance of the Eternal 4 and Eternal 5 portfolios was strong during 2010, mainly due to a sharp recovery in domestic conditions. While the portfolios' monthly payment rate (MPR) and default rate were affected by the major flooding in October 2010, the impact appears manageable with a temporary drop in MPR in December 2010 and a moderate increase in total delinquency rate since early 2011. Nonetheless, both portfolios' historical worst performances are still within Fitch's base case assumptions. In projecting the future performance of both transactions, Fitch now uses the portfolios' historical worst performances as benchmarks, which Fitch views as sufficiently conservative," says Orawan Karoonkornsakul, Senior Director in Fitch Thailand's Structured Finance team.