Bangkok--20 Aug--Fitch Ratings
Fitch Ratings (Thailand) Limited has affirmed Krungthep Land Public Company Limited’s (KLAND) debentures with three different maturities as follows:
THB500m debentures due 2013 affirmed at ‘AA+(tha)’; Outlook Stable
THB250m debentures due 2014 affirmed at ‘AA+(tha)’; Outlook Stable
THB250m debentures due 2015 affirmed at ‘AA+(tha)’; Outlook Stable
The ratings are based solely on the irrevocable and unconditional guarantee of the principal and interest payment of the debentures by Krung Thai Bank Public Company Limited (KTB, ‘AA+(tha)’/ Stable). The guarantee also includes other expenses relating to the notes of up to THB50m.
The rating of KTB is based primarily on state ownership and government support. KTB is Thailand’s second-largest bank, with an approximately 18% market share of loans and deposits. Its major shareholder is the Bank of Thailand’s Financial Institutions Development Fund (FIDF), with a 55% stake. Fitch believes there is a high probability that KTB would receive state support if needed, due to its size and importance to the country’s financial system and economy.
Founded in 1984, KLAND initially focused on developing medium- to high-end single detached house projects. KLAND later expanded into condominiums by entering into a joint venture with Frasers (Thailand) Pte Ltd. (a 100%-owned unit of Frasers Centrepoint Limited (FCL), one of Singapore’s largest residential developers) to develop its first condominium project. The company has also diversified into the development of townhouses. FCL became KLAND’s major shareholder via Frasers (Thailand) Pte Ltd. in 2005 and currently holds 40% of KLAND’s shares. Property Perfect Public Company Limited holds 20% of KLAND’s shares while the remaining 40% is mainly owned by Thai entrepreneurs.
What Could Trigger A Rating Action?
Any rating action that results in a change in KTB’s National Long-Term Rating will have a direct impact on the National Ratings assigned to KLAND’s guaranteed debentures.