Bangkok--16 May--Standard & Poor's Standard & Poor's Ratings Services today said it has assigned its 'BBB+' senior unsecured foreign currency debt rating to the following Japanese yen global bonds to be issued by the Kingdom of Thailand's (Thailand; foreign currency BBB+/Stable/A-2, local currency A/Stable/A-1): -- ?25 billion Series 22 bonds due May 20, 2011 -- ?20 billion Series 23 bonds due May 20, 2013 -- ?10 billion Series 24 bonds due May 20, 2015 Standard & Poor's issuer credit ratings on Thailand reflect a strong external creditor position, a track record of prudent fiscal management, and relatively light net government indebtedness. More recently, however, the public financial position has weakened somewhat with the government's use of fiscal stimulus to support economic growth. Consequently, the general government account is expected to show small general government deficits in fiscal 2008 and 2009. The Thai banking system also remains relatively weak and could find it a challenge to improve asset quality in the midst of current uncertainties in the global financial system. Political uncertainties, elevated since early 2006 and culminating in a military overthrow of the government in September 2006, also subtract from credit support for the government. "The formation of a new coalition government, which replaced the post-coup regime in early 2008, has reduced risks somewhat," said Standard & Poor's credit analyst Kim Eng Tan. "However, the stability of the government is threatened by the possible dissolution of the leading People's Power Party (PPP). This relates to allegations of electoral misconduct by a key party official." The outlook on the Thailand sovereign credit ratings is stable due to expectations that the political situation will improve gradually. In the near term, the two main political camps in Thailand have strong incentives to maintain political and social stability. The situation is likely to mean that the current government will remain in power through at least much of its term of office despite possible legal challenges to the PPP. Policy coherence is likely to improve over time in this environment. The sovereign credit ratings could be lowered if political stability deteriorates markedly to cause a prolonged loss of investor confident in Thailand. Conversely, a sustained reduction of political uncertainties could help to return average Thai economic growth to the projected trend rate of 6% per year. In this scenario, if a further reduction in the government debt burden occurs and is accompanied by improving banking sector balance sheet, the government's issuer credit ratings could be raised. Complete ratings information is available to subscribers of RatingsDirect, the real-time Web-based source for Standard & Poor's credit ratings, research, and risk analysis, at www.ratingsdirect.com. All ratings affected by this rating action can be found on Standard & Poor's public Web site at www.standardandpoors.com; select your preferred country or region, then Ratings in the left navigation bar, followed by Credit Ratings Search. Media Contact: David Wargin, New York (1) 212-438-1579, [email protected] Analyst Contacts: KimEng Tan, Singapore (65) 6239-6350 Elena Okorotchenko, Singapore (65) 6239-6375