Bangkok--4 Feb--Fitch Ratings
Fitch Ratings (Thailand) Limited has today affirmed the National rating of Osprey Series 2 Company Limited’s (Osprey 2) short-term bonds rollover programme (“the CP”) at ‘F1(tha)’. At present, the CP has an outstanding amount of THB136.2m, maturing in March 2010.
The rating affirmation is based on the quality of the underlying assets - NHA SPV 2 Company Limited’s (NHA SPV 2’s) 20-year amortising bonds, the revolving liquidity facility provided by Krung Thai Bank Public Company Limited (KTB, ‘AA+(tha)’/’F1+(tha)’/Stable) and the interest-rate swap agreement between Osprey 2 and KTB. Fitch has also affirmed the National rating of NHA SPV 2’s bonds at ‘A(tha)’ with a Stable Outlook, principally to reflect the defaulted receivable buyback support from National Housing Authority (NHA). At end-December 2009, approximately 89% of NHA SPV 2’s bonds had been repaid, leaving THB129.8m worth of bonds outstanding. The over-collateralisation level has been maintained at 15% since closing, and the buyback support from NHA now stands at 100% of the outstanding bonds.
This transaction is the second publicly-rated securitisation programme of Thai residential hire purchase receivables originated by NHA, financed through the CP issued by Osprey 2. Osprey 2, which acts as NHA SPV 2’s funding conduit, may issue the CP with maturities of up to 270 days as necessary, until NHA SPV 2’s bonds are fully amortised. Since closing in July 2004, the issuances of CP have been fully subscribed, except the issuance in December 2008 (in which the liquidity facility was utilised) due to the temporary lack of demand in the market.
NHA’s credit profile is based on full government ownership and control of its operations, its policy role as the key provider of social housing, and funding support received from the government. In this regard a majority of NHA’s debts are currently guaranteed by the Ministry of Finance (MOF), although Fitch notes that under the NHA Act there is no explicit government guarantee for full and timely repayment of its liabilities. After reporting net losses during FY2007 and FY2008, NHA received approximately THB2.4bn compensation from the government for loss incurring from the implementation of the ‘Baan Eua-Arthorn’ project (a housing project for low-income people initiated by the government) in FY2009. As a result, NHA reported a net profit of THB1.5bn in FY2009.
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 indicate the likely direction of any rating change over a one- to two-year period.
A copy of surveillance report will be available shortly on the agency’s website, www.fitchratings.com.
Applicable criteria available on Fitch's website at www.fitchratings.com: "Global Structured Finance Rating Criteria", dated 30 September 2009.
Contacts: Orawan Karoonkornsakul, Pramook Malasitt, Vincent Milton, Bangkok, +662 655 4755.