Bangkok--15 Jan--Fitch Ratings
Fitch Ratings (Thailand) Limited has today affirmed the National ratings of the following bonds issued by Siam Panich SPV 1 Company Limited, removed them from Rating Watch Negative (RWN) and assigned Stable Outlooks, as follows:
THB933m Tranche A bonds No.1/2006 affirmed at ‘AAA(tha)’; removed from RWN and assigned Stable Outlook; and
THB2.5bn Tranche B bonds No.2/2006 affirmed at ‘AAA(tha)’; removed from RWN and assigned Stable Outlook.
The removal of RWN follows the successful resolution of significant operational problems that arose from the transition of collection systems to Siam Commercial Bank (SCB) from Siam Commercial Leasing (SCBL) in May 2008. Portfolio delinquencies, which increased sharply during the initial transition period, have now decreased to the levels observed prior to the transition. In December 2008, the monthly delinquency ratio (defined as receivables with two months past due as a percentage of beginning portfolio) was 3.7%, which was lower than the historical average of 4.75% seen at closing and the 5.4% reported in April 2008. Although the monthly default ratio (defined as receivables with seven months past due, charged off or enforced prior to 180 days past due as a percentage of beginning portfolio) of 0.2% in December 2008 was slightly higher than the 0.16% level in April 2008, the ratio was lower than the historical average of 0.4% seen at closing.
The ratings affirmations reflect the transaction’s ability to maintain the level of credit enhancement commensurate with the ‘AAA(tha)’ ratings, despite the weakening portfolio performance. The Stable Outlooks assigned to the bonds are based on the agency’s expectation that underlying portfolio will continue to perform within Fitch’s base case assumption.
This transaction is the first securitisation transaction of auto hire purchase receivables originated by SCBL. On the closing date, SCBL sold eligible receivables to the issuer; the purchase of receivables was 75.6% funded by the issuance of the bonds and the payment of the remaining 24.4% was deferred as credit enhancement of the transaction. Other risk mitigations that support the ratings of the transaction include the reserve fund, eligibility criteria and various performance triggers for early amortisation of the transaction. The receivables are now serviced by SCBL and SCB, while the Hongkong and Shanghai Banking Corporation (‘AA’/‘F1+’) is the back-up servicer.
The ratings address the timely payment of interest and ultimate repayment of principal by the legal final maturity in March 2012 for the Tranche A bonds and March 2014 for the Tranche B bonds.
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 a specific event, Rating Outlooks provide forward-looking information to the market and indicate the likely direction of any rating change over a one- to-two-year period.
Contacts: Napachak Phasukavanich, Orawan Karoonkornsakul, 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 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.
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