Bangkok--Jan 11--Fitch Ratings
Fitch Ratings (Thailand) Limited has today assigned Expected National ratings of ‘AAA(tha) to Eternal 3 Special Purpose Vehicle Company Limited’s (“Eternal 3”) forthcoming issues of up to THB1.5 billion Class A-1 and up to THB500 million Class A-2 debentures. At the same time, the agency also assigned an Expected National rating of ‘AA(tha)’ to Eternal 3’s upcoming issue of up to THB120 million Class B debentures, and an Expected ‘A(tha)’ to the issue of up to THB160m Class C debentures.
The Expected ratings address the timely payment of interest and ultimate repayment of principal by the legal final maturity in April 2011 for the Class A-1 debentures and April 2013 for the Class A-2, B and C debentures. Provided an early amortisation or an event of default does not occur, the Class A-1 debentures are expected to be repaid by March 2009 while the Class A-2 debentures are expected to be repaid by March 2011. The Class B and C debentures are expected to be repaid thereafter. Interest will be paid on a monthly basis.
This transaction represents the second securitisation of credit card receivables originated by AEON Thana Sinsap (Thailand) Public Company Limited (“AEONTS”), a Thai consumer finance operator rated ‘A-(tha)’(A minus(tha))/Negative/‘F2(tha)’. AEONTS will sell eligible receivables corresponding to eligible accounts to Eternal 3 on a revolving basis. At the closing date, the purchase of receivables will be funded by the issuance of four classes of debentures, the subordinated loan and seller loan which will be provided by AEONTS.
Fitch’s Expected ratings are based on the subordination of 24.5% for Class A-1 and A-2 debentures, 20% for Class B debentures, 14% for Class C debentures, and reserve funds that will serve as credit enhancement; minimum seller loan to mitigate the dilution risk, and the quality of the receivables pool. The ratings also take into account the eligibility criteria to protect investors from any deterioration in the portfolio owing to its revolving nature, various early amortisation trigger events to protect investors against any severe deterioration in the portfolio and insolvency risks affecting the originator or servicer. In addition, the ratings consider AEONTS’ originating and servicing capabilities and the appointment of the Hongkong and Shanghai Banking Corporation Limited (rated ‘AA’/‘F1+’ on the international scale) as back-up servicer, as well as the sound financial and legal structures of the transaction.
Eternal 3, a special-purpose company with limited liability established under Thai law, is expected to be granted special-purpose vehicle status under Thailand’s Securitisation Law. The purchased assets are expected to have a value of up to THB2.8bn at the initial cut-off date.
The ratings are contingent upon receipt of final documents including legal opinions and signed agreements conforming to information already received and SEC approval of the securitisation programme.
A copy of the presale report will be available on the agency’s web site, www.fitchratings.com. and Fitch’s Asia website www.fitchratingsasia.com
Contact: Pimolpa Simaroj, Orawan Karoonkornsakul, Vincent Milton; Bangkok, Tel: +662 655 4755; Hilary Tan, Wit Solberg, Hong Kong, +852 2263 9904
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.
Fitch’s rating definitions and the terms of use of such ratings are available on the agency’s public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch’s code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the ‘Code of Conduct’ section of this site. End.