Bangkok--22 Apr--Fitch Affirms
Fitch Ratings (Thailand) Limited has affirmed Noble Group Limited’s (Noble) THB2.85bn guaranteed bonds due 2016 at National Long-Term ‘AAA(tha)’. The bonds, which are guaranteed by Credit Guarantee and Investment Facility (CGIF), have a Stable Outlook.
Key Rating Drivers
Guarantee from CGIF: The rating of the bonds reflects the unconditional and irrevocable guarantee of scheduled payments of interest and principal provided by CGIF. In Fitch’s view CGIF’s credit profile is stronger than Thailand’s Long-Term Local Currency IDR of ‘A-’, which is equivalent to ‘AAA(tha)’ on the National rating scale. The bonds are, therefore, rated at ‘AAA(tha)’.
Risk from Acceleration: The bondholder representative may demand payment under the guarantee only upon the occurrence of a non-payment event under the bonds. The bondholder representative has the right to accelerate the bond payments against the issuer upon an occurrence of any event of default. However, if the bondholder representative exercises this right, CGIF will no longer be obligated to make payments under the guarantee.
Currency Risk: The bondholders may not receive payment in Thai baht under the guarantee, if the guarantor determines that it is impossible or impracticable or that it is unable on commercially reasonable terms and in accordance with its policy to obtain Thai baht to fund the bond payment. In such an event, CGIF may make the payment with an equivalent amount is US dollars.
Established as a trust fund of Asian Development Bank (AsDB; AAA/Stable) in November 2010, CGIF provides financial guarantee insurance to corporate bonds issued in the Association of Southeast Asian Nations (ASEAN), plus Japan, China and Korea, to protect investors against default. CGIF’s capital contributors include the ASEAN members as well as the AsDB, China, Japan and Korea.
Rating Sensitivities
Negative: Future developments that may, individually or collectively, lead to negative rating
action include:
- deterioration in CGIF’s credit profile relative to Thailand’s Long-Term Local Currency IDR
Positive: No positive action is expected as the rating is at the highest end of the National rating scale.