Bangkok--28 Jan--Fitch Ratings Fitch Ratings (Thailand) Limited has today affirmed the National 'AAA(tha)' rating of the THB4.0 billion asset-backed debentures issued by SICCO Special Purpose Vehicle 1 Company Limited (SICCO SPV 1). At the same time, Fitch has placed the 'AAA(tha)' rating of the THB3.0 billion asset-back debentures issued by SICCO Special Purpose Vehicle 2 Company Limited (SICCO SPV 2) on Rating Watch Negative (RWN). Fitch's ratings address the likelihood of full and timely payment of interest and ultimate repayment of principal by the legal final maturity. The ratings, however, do not reflect the likelihood of early amortisation events. The rating affirmation on SICCO SPV 1 is based on Fitch's expectation that the transaction should be able to maintain its credit enhancement level commensurate with its current rating. Despite a sharp deterioration in the collateral performance, the actual cumulative default rate of the transaction since the start of the controlled amortisation period in December 2006 has been within Fitch's base case assumption. The portfolio of SICCO SPV 1 only contains receivables arising from new vehicles originated in Bangkok. On the other hand, the placing of SICCO SPV 2 on RWN reflects signs of a sharp deterioration in asset quality, which if such a trend continues, may impact the credit enhancement level required for the 'AAA(tha)' rating of the transaction. While the transaction has been able to maintain its credit enhancement level at the level provided at closing, the negative trends in delinquency and default ratios are concerning, due to relatively poor performance of the pick-up car and, in particular, truck segments - which represent 47% and 14% of the outstanding portfolio respectively in December 2007. The portfolio of SICCO SPV 2 mainly contains receivables arising from new vehicles originated in the provinces, which tend to be more sensitive to weakening economic conditions than those originated in Bangkok. Both portfolios showed a rapid increase in delinquency and default ratios over the past six months, mainly due to prolonged unfavourable economic conditions and some limitations in Siam Industrial Credit Public Company Limited (SICCO)'s origination and servicing functions. All vehicle segments have exhibited deteriorating performance, of which trucks reported the highest delinquency. Due to rising delinquency, SICCO plans to tighten its collection policy by adding additional outsourced collectors to oversee early delinquent accounts and reallocating more staff to the collection function. The new collection policy will become effective on February 1, 2008. For the THB3.0 billion asset-back debentures issued by SICCO Special Purpose Vehicle 3 Company Limited (SICCO SPV 3) which was issued in April 2007, the cumulative default of the portfolio has so far been within Fitch's base case assumption, but due to the short period since closing, this will be subject to ongoing review. The transactions are the first and second securitisation transactions of auto hire purchase receivables originated by SICCO. The receivables continue to be serviced by SICCO, while the Hongkong and Shanghai Banking Corporation Limited (HSBC, rated 'AA/F1+' on the international scale) is the back-up servicer for both transactions. Copies of surveillance reports will be available 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. Media Relations: Shivani Sundralingam, Singapore, Tel: + 65 6796 7215.