Bangkok--12 Nov--Fitch Ratings
Fitch Ratings (Thailand) Limited has today affirmed the National ratings of bonds issued by DAD SPV Company Limited (DAD SPV), as follows:
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 affirmations are based on the available committed stable cash flows from the Treasury Department (TD) of the Thai Ministry of Finance (MoF), and the structure of the transaction. The Stable Outlooks reflect Fitch’s expectation that minimum debt service coverage ratio of at least 1.0x will be maintained and that the transaction can withstand a higher refinancing rate than Fitch’s assumption of 15%. While bonds due in 2025 are subject to refinancing risk, this is mitigated by a principal accumulation reserve and the remaining cash flow from 2025 onwards. The ratings address the timely payment of interest and the ultimate repayment of principal on bonds by their legal final maturity.
The transaction is the 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 credit linked to the creditworthiness of the sole underlying obligor, the TD 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 project, which began in 2004 with a master plan and building design, was initially scheduled to be completed by Q308. Given a delay in the construction of the buildings and changes in interior design, the completion schedule has been postponed to Q110. According to the construction progress report, as of September 2009 the construction of the Administrative Court building and Building B were fully completed, while the completion rate of the construction of Building A was at 96.5%. The interior decoration of the Administrative Court building has been completed as well, although the interior decoration of Building A and Building B is still ongoing. Approximately 60.3% of total space has been handed over to tenants with the remainder to be handed over by Q110.
The lease payments have been made to DAD SPV since July 2008, despite ongoing construction and interior decoration of certain parts of the project. As specified in the lease and service agreements, payment of the lease is unconditional to the completion of the project. For this year, DAD SPV received the annual lease payments from TD in late October as scheduled; the annual lease payments were subsequently allocated to three reserve accounts covering upcoming one-year interest and other expenses, liquidity reserve and predetermined principal reserve amount to be delivered to its swap counterparty.
A copy of a performance report for this transaction will be available shortly on Fitch’s website at www.fitchratings.com.
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.
Applicable criteria available on Fitch’s website at www.fitchratings.com: “Global Structured Finance Rating Criteria,” dated September 30, 2009.
Contacts: Orawan Karoonkornsakul, Pramook Malasitt, 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.
Additional information is available at www.fitchratings.com.
ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK:HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE VAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE.