Bangkok--20 Nov--Fitch Ratings Fitch Ratings (Thailand) has today affirmed the National Short-term rating of 'F2(tha)' of Finansa Public Company Limited's (FNS) up to THB1 billion bill of exchange program with a maturity of up to 270 days. The rating is based on the creditworthiness of FNS - rated National Long-term 'BBB(tha)'/Negative Outlook and Short-term 'F3(tha)' - and the credit enhancement from the 50% principal guarantee by the Netherlands Development Finance Company (FMO). FMO's credit rating is similar to the Netherland sovereign rating ('AAA'/Stable/'F1+'), given its 51%-ownership by the sovereign, and the fact that it receives sovereign support under the 1998 Agreement with the State of The Netherlands. FNS bills of exchange holders expect to receive payment of principal in the first instance from FNS. In the event FNS fails to meet the payment, FMO will make payment of 50% of principal only. The partial guarantee from FMO reduces the loss to investors when a default occurs. Nonetheless, the guarantee provides that the FMO will have subrogation rights against FNS once it has paid out any amounts in connection with the guarantee and the bills of exchange holders may be claiming in competition with FMO in the event that the bills of exchange are not paid out in full by FNS or if FNS becomes insolvent. FMO was established by the State of The Netherlands and the Dutch business community in 1970. Currently, the Dutch State holds 51% while the large Dutch banks hold 42% of its shares. FMO's main activity is to support the private sector in developing countries and emerging markets in Asia, Latin America and Central and Eastern Europe with an objective of contributing to the structural and sustainable economic growth in these countries and, alongside the private sector, obtain healthy returns. According to the agreement between the State of The Netherlands and FMO signed in 1998, the State of the Netherlands shall prevent situations arising in which FMO is unable to meet its obligations on time. Such obligations include guarantees given to third parties in respect of the financing of private companies in developing countries. As a result, Fitch believes there is an extremely high probability of Netherland government support for FMO in the event this is needed. The current ratings of FNS reflect the company's financial holding company structure, its revenue diversification, and its adequate capital. However, the ratings also take into account FNS' lack of a strong financial institutional shareholder, its exposure to market, credit and liquidity risks, as well as its dependence on volatile brokerage earnings and investments. FNS is shifting its credit subsidiary's focus to auto finance from commercial lending to improve performance. FNS reported a net loss of THB124m in 9M07 due to further provisioning at its finance subsidiary and weak investment banking and brokerage activity. While market volume has improved significantly in recent months, which should result in improved brokerage revenues, additional provisioning at its finance subsidiary and mark to market losses on a large investment of THB880m (34% of FNS's equity) in CDOs may result in a further loss in Q4. At end-September 2007, FNS' equity/asset ratio stood at 28.6%, stable from the prior year, which should provide FNS the ability to absorb significant losses on its CDO exposure. Co-founders and senior management have increased their stake holdings in the firm to about 50% from 40% over the past year. FNS has taken steps to improve its core brokerage business and improve risk controls and disclosure which should see improved performance in 2008. Otherwise, substantial losses on its CDO exposure, rising funding pressures and continued weakness in its operating environment could see a downward revision of the ratings. Contacts: Vincent Milton/Darunee Peanmanakit, Bangkok, +662 655 4759. Media Relations: Shivani Sundralingam, Singapore, Tel: + 65 6796 7215.