Bangkok--23 May--Fitch Ratings (Thailand)
Fitch Ratings (Thailand) Limited has today affirmed Siam Panich SPV 1 Company Limited's (the issuer) National 'AAA(tha)' ratings on its issues of THB2.5 billion Tranche A debentures no.1/2006 and THB2.5bn Tranche B debentures no. 2/2006, both issued in March 2006. The ratings address the timely payment of interest and ultimate repayment of principal by the legal final maturity in March 2012 for the Tranche A debentures, and March 2014 for the Tranche B debentures.
The affirmations reflect the satisfactory performance of the underlying receivables against the agency's base-case expectations. Since closing, the coverage ratio of the portfolio has been stable, the delinquency rate of 4.65% in April 2007 was slightly below historical average of 4.75% reported in early 2006, and there has been no significant change in the portfolio composition which could adversely affect the quality of the securitised receivables.
This transaction is the first securitisation transaction of auto hire purchase receivables originated by Siam Commercial Leasing Public Company Limited (SCBL, formerly known as Siam Panich Leasing Public Company Limited). On the closing date, SCBL sold eligible receivables to the issuer; the purchase of receivables was 75.6% funded by the issuance of the bonds and the payment of the remainder 24.4% was deferred as credit enhancement of the transaction. Risk mitigating factors, which support the ratings, include reserve funds, eligibility criteria, various performance triggers for early amortisation, and the sound financial and legal structures of the transaction. The receivables are serviced by SCBL, while the Hongkong and Shanghai Banking Corporation Limited (HSBC, rated 'AA'/ 'F1+') is the back-up servicer.
SCBL was affirmed at 'A(tha)'/'F1(tha)' in March 2007 - after an upgrade from 'BBB+(tha)'/'F2(tha)' in May 2006 - on the basis of stronger financial and operational support from Siam Commercial Bank (SCB) which increased its share in SCBL to 96.55%. With strong support from SCB in terms of funding and marketing channels, SCBL plans to double its hire purchase portfolio by the end of 2007 with a targeted new origination of THB60-65bn. Such an aggressive origination target raises concerns over its origination policy, although SCBL management stated that the company has no plans to loosen its origination policy - the growth will come from SCBL's expansion into new areas in the provinces and new vehicle brands. At any rate, given the transaction's stringent eligibility criteria, any changes in origination policy should not significantly impact the securitised portfolio.
A copy of the surveillance report will be available shortly on the agency's website, www.fitchratings.com and Fitch's Asian website www.fitchratingsasia.com
Contacts: Napachak Phasukavanich, Orawan Karoonkornsakul, Vincent Milton; Bangkok, Tel: +662 655 4755.
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.
Media Relations: Shivani Sundralingam, Singapore, Tel: + 65 6336 0095.
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.