Bangkok--4 Jun--Fitch Ratings (Thailand)
Fitch Ratings (Thailand) Limited has today assigned expected National ratings of ‘AAA(tha)’ to Eternal 4 Special Purpose Vehicle Company Limited’s (Eternal 4) 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 has assigned an expected National rating of ‘AA(tha)’ to Eternal 4’s upcoming issue of up to THB205m Class B debentures, and an expected ‘A(tha)’ to the issue of up to THB210m Class C debentures.
The expected ratings address the timely payment of interest and the ultimate repayment of principal by the legal final maturity in October 2012 for the Class A-1 debentures and October 2014 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 June 2010, while the Class A-2 debentures are expected to be repaid by June 2012. The Class B and C debentures are expected to be repaid thereafter. Interest will be paid on a monthly basis.
This transaction represents the third securitisation of credit card receivables originated by Thai consumer finance operator AEON Thana Sinsap (Thailand) Public Company Limited (AEONTS, ‘BBB+(tha)’/Stable/‘F2(tha)’). AEONTS will sell to Eternal 4 eligible receivables corresponding to eligible accounts on a revolving basis. At the closing date, the purchase of receivables will be funded by the issuance of four classes of debentures, as well as the subordinated loan and seller loan to be provided by AEONTS.
Fitch’s expected ratings are based on the subordination of 32.2% for Class A-1 and A-2 debentures, 25.2% for Class B debentures, 18.1% for Class C debentures, and reserve funds that will serve as credit enhancement; other factors include 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 (‘AA’/‘F1+’) as back-up servicer, as well as the sound financial and legal structures of the transaction.
Eternal 4, a SPC with limited liability established under Thai law, is expected to be granted SPV status under Thailand’s Securitisation Law. The purchased assets are expected to have a value of up to THB3.04bn at the initial cut-off date.
The final 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
Contacts: Orawan Karoonkornsakul, Napachak Phasukavanich, Vincent Milton, Thailand, 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.
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.