Bangkok--2 May--Fitch Ratings (Thailand)
Fitch Ratings (Thailand) Limited has today assigned a final National Long-term rating of ‘AAA(tha)’ to three tranches of amortising and guaranteed debentures issued by Gulf Cogeneration Company Limited (“GCC”). The three-year tranche of THB1.74 billion, five-year tranche of THB1.16bn and 10-year tranche of THB2.9bn, mature April 2009, April 2011 and April 2016, respectively. The rating Outlook is Stable.
The rating is based entirely on the irrevocable and unconditional guarantee of the principal and interest payments of the debentures by Ireland-based DEPFA BANK plc (“DEPFA”, Long-term Foreign Currency Issuer Default Rating ‘AA-’ (AA minus)/Stable).
In line with Fitch’s rating methodology, the International ‘AA-’ (AA minus) rating for DEPFA is currently above the Thai sovereign’s (rated Long-term Local Currency Issuer Default ‘A’/ Stable Outlook). As a result, the guaranteed debentures are capped at Thailand’s National rating of ‘AAA(tha)’. Fitch says that any changes in the International ratings of DEPFA and the Thai sovereign, which cause the ratings of DEPFA to become lower than those of the Thai sovereign, will affect the debentures’ National rating. Investors should note that a one notch change in the differential between International ratings of DEPFA and the Thai sovereign could result in change of greater than one notch in the debentures’ National rating.
Bondholders should note that the guaranteed amounts do not include additional interest, namely the difference between the debenture interest rate and the debenture default interest rate on the unpaid principal and interest, in case of events of default. However, this should be mitigated by a reserve account of THB5 million for this non-guaranteed amount. Bondholders should also note that they might receive payment in Japanese Yen from the guarantor, if there is an imposition of exchange controls by the Bank of Thailand that restricts conversion to Thai baht.
The rating of the guarantor, DEPFA, reflects its low credit risk and the bank’s expertise in its chosen business, consisting exclusively of public sector finance, mainly in Europe, but gradually on a global basis as well. The ratings also reflect its good performance, reasonable capital ratios, its relatively small equity base and its controlled exposure to market risks. DEPFA is a leading European arranger of public sector finance, and is also active in the US, Canada and Japan. It concentrates wholly on public sector financing and is organised into three business units - budget financing (its largest business), infrastructure financing and financial engineering - with a total earning assets of EUR208bn at end-September 2005.
GCC is a small power producer with electricity sales primarily to Electricity Generating Authority of Thailand (“EGAT”), Thailand’s national integrated electric utility company, under the Small Power Producer (“SPP”) programme. GCC started operations in September 1998 and has a current generating capacity of 112MW of electricity and 16 tonnes per hour of steam. GCC is a wholly-owned subsidiary of Gulf Electric Plc, an electric holding company with three already-operational small power plants and two power plants under construction with a total future capacity of 1,847MW.
Contact: Lertchai Kochareonrattanakul, Wasant Polcharoen, Vincent Milton, Bangkok, Tel : +662 655 4755 ; Matthew Taylor, London, Tel: +44 20 7417 4345
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.