Bangkok--4 Nov--Fitch Ratings
Fitch Ratings (Thailand) Limited has today affirmed the National ratings of the following bonds issued by DAD SPV Company Limited (DAD SPV) and assigned Stable Outlooks as indicated below. The ratings address the timely payment of interest and the ultimate repayment of principal on bonds by their legal final maturity. THB1.5bn DAD12NA (due November 2012) affirmed at 'AAA(tha)'; Outlook Stable;
THB2.0bn DAD15NA (due November 2015) affirmed at 'AAA(tha)'; Outlook Stable;
THB1.8bn DAD20NA (due November 2020) affirmed at 'AAA(tha)'; Outlook Stable;
THB5.0bn DAD25NA (due November 2025) affirmed at 'AAA(tha)'; Outlook Stable;
THB2.2bn DAD20NB (due November 2020) affirmed at 'AAA(tha)'; Outlook Stable;
THB6.0bn DAD25NB (due November 2025) affirmed at 'AAA(tha)'; Outlook Stable; and
THB5.5bn DAD25NC (due November 2025) affirmed at 'AAA(tha)'; Outlook Stable.
The transaction is the first securitisation programme initiated by the Thai Government and is backed by the 30-year lease and fee payments (lease payments) of the new government office centre at Chaeng Wattana. The transaction is structured to mirror the creditworthiness of the sole underlying obligor, the Treasury Department (TD) of the Ministry of Finance (MoF) via committed lease payments from the TD. Dhanarak Asset Development Company Limited (DAD), an asset development company wholly-owned by the MoF, is responsible for developing the project.
The rating affirmations are based on the available committed stable cash flows from the TD and the structure of the transaction. While the construction of the project has not been completed, the one-year lease payments were made in July 2008, unconditional to the completion of the project as specified in the lease and service agreements. The lease payments received by DAD SPV were allocated to three reserve accounts covering upcoming one-year interest and other expenses, required liquidity reserve and predetermined principal reserve amount to be delivered to its swap counterparty. These lease payments were jointly funded by the TD and DAD, given the timing mismatch of the TD's obligations under the lease and service agreements and its allocated budget. Nonetheless, this timing mismatch issue was recently resolved through amendments to the transaction documents, approved by the bondholders in September 2008. Subsequently, the timing of one-year lease payments has been changed to be consistent with the TD's budget year and is now scheduled to be paid in every October.
Fitch has assigned Stable Outlooks to all DAD SPV's bonds to reflect the expectation that the transaction should be able to maintain the minimum debt service coverage ratio of 1.0x and withstand a higher refinancing rate than Fitch's assumption of 15%.
Rating Outlooks have been published for all newly issued Asia Pacific Structured Finance tranches since June 2008, and concurrently with rating actions for tranches issued prior to June 2008. Unlike a Rating Watch which notifies investors that there is a reasonable probability of a rating change in the short term as a result of specific event, Rating Outlooks indicate the likely direction of any rating change over a one-to-two-year period.
A copy of the performance report will be available shortly on www.fitchratings.com and www.fitchratingsasia.com.
Contacts: Orawan Karoonkornsakul, Napachak Phasukavanich, Vincent Milton, Bangkok, +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 sand 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.
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