Bangkok--30 Jan--Fitch Ratings
Fitch Ratings (Thailand) Limited has today downgraded the National Long-term rating of Mercedes-Benz (Thailand) Limited’s (MBTh) THB2.5bn guaranteed debentures due 2009 to ‘AA(tha)’ from ‘AA+(tha)’, following a downgrade on Germany’s Daimler AG (Daimler), MBTh’s guarantor and parent. The Outlook is Stable. The rating is based entirely on the full, irrevocable and unconditional guarantee provided by Daimler.
On 29 January 2009, Fitch downgraded Daimler’s Long-term Issuer Default rating (IDR) to ‘BBB+’ from ‘A-’ (A minus). The Outlook is Stable. The downgrade reflects the reassessment of Fitch’s view and the revision of its forecasts for Daimler in 2009 and 2010. Fitch now anticipates Daimler to exhibit much weaker profitability and cash generation than previously expected. The extent and rapidity of the deterioration shows Daimler’s lower-than-expected resilience in a challenging environment. As such, Daimler’s credit profile is presently inconsistent with a Long-term IDR in the ‘A’ category.
The Stable Outlook reflects the reasonable headroom within a ‘BBB+’ rating. However, further pressure on the ratings could occur should Fitch assess that the current downturn in new car and truck sales is accelerating and looks set to last beyond 2010. Likewise, sustained negative free cash flow generation and refinancing issues, especially in the financial services business could be seen in a negative light. For further details, please see the commentary entitled “Fitch Downgrades Daimler to BBB+; Outlook Stable”, available on the agency’s website, www.fitchratings.com.
Contacts: Lertchai Kochareonrattanakul, Vincent Milton, Bangkok, +662 655 4755; Emmanuel Bulle, Paris, +33 1 44 29 91 84.