Bangkok--23 Apr--Fitch Ratings
Fitch Ratings (Thailand) Limited has today affirmed the National Long-term rating of 'AAA(tha)' for three tranches of amortising and guaranteed debentures issued by Gulf Cogeneration Company Limited (GCC). This includes the three-year tranche of THB1.74 billion, five-year tranche of THB1.16bn and 10-year tranche of THB2.9bn, maturing April 2009, April 2011 and April 2016, respectively. The rating Outlook remains 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 (IDR) 'AA-' (AA minus)/Stable). As DEPFA's rating is currently above that of the Thai sovereign (rated Long-term Local Currency IDR 'A'/ Stable Outlook), 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, causing 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 the International ratings of DEPFA and the Thai sovereign could result in a change of greater than one notch in the debentures' National rating.
Bondholders should also 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, is based on 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 organised into five business units - budget financing (its largest), infrastructure financing, client product services, global markets and corporate centre - and reported total earning assets of EUR223bn at end-2006.
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 Public Company Limited, an electric holding company with four already-operational small power plants and one power plant under construction with a total future capacity of 1,847MW.
Contacts: Obboon Thirachit, Lertchai Kochareonrattanakul, Vincent Milton, Bangkok, Tel: +662 655 4755 ; Matthew Taylor, London, Tel: +44 20 7417 4345
Media Relations: Shivani Sundralingam, Singapore, Tel: + 65 6336 6801.