Bangkok--3 Jul--Fitch Ratings
Fitch Ratings (Thailand) Limited has today affirmed the National Long-term rating of Tri Petch Isuzu Sales Company Limited’s (TIS) THB2.0bn guaranteed debentures due in 2009 at ‘AAA(tha)’. The Outlook remains Stable.
The rating is based entirely on the full, irrevocable and unconditional guarantee provided by TIS’s parents, Mitsubishi Corporation (MC, ‘A+’/Stable Outlook). As MC’s rating is currently above Thailand’s Long-term local currency Issuer Default Rating of ‘A-’, the guaranteed debentures are capped at the sovereign National rating of ‘AAA(tha)’. Fitch notes that any rating action that results in MC’s rating falling below the Thai sovereign will affect the debentures’ National rating. Investors should note that a one-notch change in an International rating could result in a more than one notch change in a National rating.
MC’s rating reflects its leading position as one of the largest general trading companies in Japan in terms of sales, net profit and total assets, including a sound equity base. MC reported a net profit of JPY369.9bn in FYE 31 March 2009, down 21.4 % yoy, given the large write-down of market securities as a result of the sharp drop in stock prices and the yen’s appreciation leading to lower foreign revenues upon conversion. However, its operating income rose to a record high of JPY588.9b from a significant increase in coal price. In FYE 31 March 2009, metal and energy businesses remained key MC’s earning drivers, while industrial finance and logistics & development group booked a loss.
MC’s liquidity is adequate, supported by its cash and cash equivalents and time deposits of JPY1,328.1bn, up 74.4% yoy as a result of fund raising to secure liquidity during the global economic crisis. Together with the decrease in profit, MC’s net debt equity ratio (DER) increased to 1.5x at end-March 2009, which remained lower than its net DER target of less than 2.0x. However, under the conditions of the gloomy economic outlook and lower global trade resulting in decreased transaction volumes, MC forecasted its net profit of JPY220bn in FYE 31 March 2010.
TIS is about 89% owned by the MC group and is one of the largest distributors of commercial vehicles in Thailand. The company is primarily involved in automobile-related businesses (i.e. car assembly, die and parts manufacturing, after-sales service, automobile export, and car hire-purchase) via its subsidiaries and associates. It has also maintained a leading position in commercial vehicle sales in the local market, with a share in the pick-up vehicle market of around 40% for the first five months of 2009.
Contacts: Lertchai Kochareonrattanakul, Ekapan Prompraphant, Vincent Milton, Bangkok, +662 655 4755; Frederic Gits, Tokyo, +81 3 3288 2992.
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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