Bangkok--Oct 20--Fitch Ratings
Fitch Ratings (Thailand) Limited today affirmed the National Long-term rating of ‘A+(tha)’ on the 10-year amortising debentures (“the bonds”) issued by NHA SPV Company Limited (“NHA SPV”). At the same time, the agency also affirmed the Short-term rating of ‘F1(tha)’ on the entire series of short-term debenture rollover programmes issued by Osprey Series I Company Limited (“Osprey”), which is acting as NHA SPV's funding conduit. This transaction is a securitisation of Thai residential hire-purchase receivables originated by the National Housing Authority of Thailand (“NHA”), which is, in turn, financed through a commercial paper issuance of Osprey issued in November 2002.
The ratings assigned to the programme are based on the buy-back support by NHA to cover defaulted hire purchase receivables; the strength of the servicing provided by NHA; 10% overcollateralisation of assets; the reserve funds; the 100% revolving liquidity facility provided by Krung Thai Bank (“KTB”, rated ‘AA(tha)’/‘F1+(tha)’ by Fitch); and the interest rate swap agreement with KTB to hedge against Osprey’s interest rate risk.
Over the past collection year (Sep 2003-Aug 2004), principal collections on the receivables totalled THB70.5 million, while principal buy-back from NHA totalled THB36.6m (9.9% of the portfolio), reflecting relatively weak asset quality, although the buy-back portion accounted for a lower percentage than the previous year (16.4%). The bonds have paid down a total of THB137.7m in the period. Since the cut-off date on 31 August 2002, total principal buy-back has amounted to 21.8% of the initial portfolio, or approximately THB145.9m, while the bonds have paid down a total of THB391.8m or 64.5%. Given the bond amortisation and the buy-back support arrangement with NHA, the available buy-back facility now effectively covers 100% of bonds outstanding. As at the end of August 2004, the remaining portfolio value was THB237.7m with 4,436 loans outstanding, while the bond outstanding amount was THB216.1m.
The pool of receivables will continue to be serviced by NHA, which Fitch believes has expertise in managing its originated loans, particularly with regard to hire-purchase residential properties. NHA, a wholly-owned state enterprise, is rated ‘A+(tha)’ by Fitch based on the full government ownership and control of its operations, its policy role and the strong funding support as evidenced by annual budget appropriations, debt-to-equity conversion and government-guaranteed funding. However, the rating also factors in NHA’s weak stand-alone financial position and the lack of an explicit government guarantee of full and timely repayment of all NHA’s liabilities.
A copy of the credit update report for Osprey Series I will be available on the agency’s web site, www.fitchratings.com.
Contact: Pimolpa Simaroj, Orawan Karoonkornsakul, Vincent Milton; Bangkok, Tel: +662 655 4755; Ben McCarthy, Hong Kong, +852 2263 9922.
Note to Editors: Fitch’s National ratings provide a relative measure of creditworthiness for rated entities in countries with sub- or low-investment grade international sovereign ratings. The best risk within a country is rated ‘AAA’ and other credits are rated only relative to this risk. National ratings are designed for use mainly by local investors in local markets and are signified by the addition of an identifier for the country concerned, such as ‘AAA(tha)’ for National ratings in Thailand. Specific letter grades are not therefore internationally comparable. End.