Bangkok--30 Jan--Fitch Ratings
Fitch Ratings-Bangkok/Singapore- 30 January 2009: Fitch Ratings (Thailand) has today affirmed the rating of the bonds issued by SICCO Special Purpose Vehicle 1 Company Limited (SICCO 1) due 2011, and assigned a Stable Outlook as follows:
THB950m bonds affirmed at ‘AAA(tha)’; Outlook Stable.
The rating affirmation reflects the satisfactory performance of the portfolio compared to Fitch’s base case assumptions and the ability of the transaction to maintain a coverage ratio (or the over-collateralisation level) above 1.2x, the level for loss protection and commingling risk under an ‘AAA(tha)’ stress scenario.
Since the start of controlled amortisation period in November 2006, the cumulative default rate of the portfolio has been moderately below the base case assumption used in Fitch’s model. Although the liquidity reserve event was triggered in December 2008 after the delinquency ratio exceeded 3.75%, Fitch believes that the rising portfolio’s delinquencies have been attributable not only to the weak economic environment but also to the amortisation of the portfolio (in which remaining delinquent customers tend to account for the high proportion of shrinking portfolio). At end-2008, the outstanding portfolio balance was THB818m, equivalent to 17% of initial portfolio at closing. The cumulative cash in collection account, as well as remaining performing receivables, should be sufficient in meeting repayment obligations. The Stable Outlook reflects the agency’s expectation that the portfolio should continue to perform within its base case assumptions.
The transaction is the first securitisation transaction of auto hire purchase receivables originated by Siam Industrial Credit Public Company Limited (SICCO). At closing, SICCO 1 purchased the rights to receive cash flows from eligible hire purchase agreements from SICCO; the purchase of receivables was 81% funded by the issuance of the bonds and the payment of the remainder 19% was deferred as a credit enhancement of the transaction. The receivables continue to be serviced by SICCO, while Hongkong and Shanghai Banking Corporation Limited (HSBC, ‘AA/F1+’/Outlook Negative) is the back-up servicer for the transaction. The rating addresses timely payment of interest and ultimate repayment of principal by legal final maturity in November 2011.
Ratings 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.
A copy of the surveillance report will be available on the agency’s websites, www.fitchratings.com and www.fitchratingsasia.com.