Bangkok--Mar 2--TRIS Rating
TRIS Rating Co., Ltd. has affirmed the company rating of Siam Panich Leasing PLC (SPL), the ratings of its current senior debentures and the rating of its bills of exchange at “A-”. At the same time, TRIS Rating has assigned the rating of “A-” to SPL’s proposed Bt4,000 million senior debentures. The rating outlook remains “stable”. The ratings are based on the strong market position of SPL in the automobile hire purchase market and its experienced management team. However, these strengths are partially offset by intense competition, due to the entry of captive finance companies into the new car hire purchase business, and aggressive moves by finance companies into both new and used car hire purchase businesses.
The “stable” outlook reflects the fact that SPL will be able to maintain both its strong market position and the growth of its portfolio in line with TRIS Rating’s expectations. With an experienced management team and a conservative credit approval process, non-accrual loans will be maintained at an acceptable level, though slightly higher in 2004 compared with 2003.
TRIS Rating reported that it assigned “A-” rating to SPL’s proposed up to Bt3,500 million senior debentures on 10 February 2005; however, the company decided to increase the offering amount from Bt3,500 million to Bt4,000 million. SPL will use the proceeds from its proposed debentures to refinance its Bt3,250 million debentures that will mature in March and May 2005, with the remainder used to fund its expansion. The company received Bt551 million in equity from the exercise of warrants (SPL-W2) in December 2004. SPL used all its additional funds to expand its portfolio. Its portfolio increased by 28.1% in 2004, from Bt29,152 million at the end of 2003 to Bt37,341 million at the end of 2004. Although the growth rate in 2004 was lower than the 36.2% growth recorded in 2003, the level of growth is in line with TRIS Rating’s expectation, as the growth rate of the automobile industry is also declining following years of rapid growth. SPL’s net income grew by 8.8% in 2004 to Bt849 million. The automobile industry is expected to grow continuously over the next 2-3 years, but at a rate lower than the last three years. SPL will be able to expand its portfolio in line with the growth of the industry, which is expected to grow approximately 10%-15% in 2005. End.