Bangkok--Nov 23--Fitch Ratings
Fitch Ratings (Thailand) Limited today assigned Final National ratings of ‘AAA(tha)’ to DAD SPV Company Limited’s (“DAD SPV”) upcoming issues of up to THB10.3 billion of Series 1 to 4 Bonds with tenors of seven, 10, 15, 20 years. The securitisation programme permits bond issuance of up to THB24.0bn within three years. The issuance of the remaining bonds is dependent on the issuance not affecting the ratings of the outstanding bonds.
The transaction is the first securitisation programme initiated by the Thai Government and is backed by the 30-year lease and fee payments to be received from the new government office centre at Chaeng Wattana. Thanarak Asset Development Company Limited (“DAD”), an asset development company wholly-owned by the Ministry of Finance (“MoF”), is responsible for developing the project. At closing, the issuer will purchase the rights from DAD to receive cashflow from Treasury Department (“TD”) of the MoF under three agreements, namely a lease of building space agreement, a services agreement and a furniture procurement agreement. The purchase price is approximately THB40.0bn which is partly funded by the proceeds of the bonds while the balance is funded by the issuance of subordinated promissory note to DAD, which will rank after the bondholders according to the waterfall structure, effectively serving as the credit enhancement.
The ratings are supported by the unconditional and irrevocable committed stable cashflow from the sole underlying obligor, TD - which is a department of the Thai government (rated National ‘AAA(tha)’) - and the full upfront reserves for interest and expense payable during the construction period as well as on-going principal accumulation reserve. The potential refinancing risk of Series 4 bonds, if additional bonds are issued, is partly mitigated by a principal accumulation reserve which should help reduce the amount of bonds to be refinanced at year 2025. This, together with the remaining cashflow from year 2025 onwards, should result in positive debt service coverage up to Fitch’s refinance rate assumption of 15% which is based on the historical government reference yield for a National ‘AAA(tha)’ stress scenario.
The issuer, a special-purpose company with limited liability established under Thai law, is expected to be granted special-purpose vehicle status under the Securitisation Law from the Securities and Exchange Commission (“SEC”).
A copy of the report will be available on the agency’s web site, www.fitchratings.com. and Fitch’s Asian website www.fitchratingsasia.com
Contact: Pimolpa Simaroj, Orawan Karoonkornsakul, Vincent Milton; Bangkok, Tel: +662 655 4755; Stan Ho, Wit Solberg, Hong Kong, +852 2263 9963
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.
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