Bangkok--14 May--Fitch Ratings
Fitch Ratings has affirmed the ratings of the debentures issued by Eternal 4 Special Purpose Vehicle Company Limited (Eternal 4) and Eternal 5 Special Purpose Vehicle Company Limited (Eternal 5). 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 follows:
Eternal 4:
THB500m Class A-2 (ISIN TH-094703OA0-1) debentures affirmed at National Long-Term ‘AAAsf(tha)’; Outlook Stable
THB205m Class B (ISIN TH-0947A3OA0-1) debentures affirmed at National Long-Term ‘AAAsf(tha)’; Outlook Stable
Eternal 5:
THB2,790m debentures (ISIN TH103503P504) affirmed at International Long-Term Local Currency ‘A-sf’; Outlook Stable
Fitch notes that the key parameters of both transactions have been within the agency’s base case assumptions. The rating affirmation and Stable Outlook are underpinned by the transactions’ satisfactory historical performance, strong credit enhancement levels - particularly for Eternal 4 where credit enhancement has built up via principal accumulation - and expected recovery of the Thai economy in 2012.
“The Eternal 4 and Eternal 5 portfolios have been resilient to several economic stresses since closing, including the worst flooding in Thailand for decades in late 2011,” says Orawan Karoonkornsakul, Senior Director in Fitch Thailand’s Structured Finance team. “Although the performance of both portfolios was hit during late 2011 and early 2012 by the floods, the impact has been manageable.”
AEONTS granted payment grace periods to customers affected by the floods, who accounted for almost 10% of the transactions’ total customers. As a result, the monthly payment rate in both transactions declined between November 2011 and January 2012 before recovering in February 2012 as the grace period for about 90% of the affected customers came to an end. The support scheme also caused a temporary pause in both delinquencies and the default rate during the grace period; the latter did not show a sharp increase until February 2012.