Bangkok--19 May--Fitch Ratings
Fitch Ratings-Bangkok/Hong Kong/Singapore-18 May 2010: Fitch Ratings has today assigned the following expected International Local Currency ratings to Eternal 5 Special Purpose Vehicle Co., Ltd.'s (Eternal 5) asset-backed debentures: THB2,790m asset-backed debentures fixed-rate at 'A-'; Loss Severity Rating at 'LS2'; Outlook Negative. Fitch's expected ratings are based on the quality of the underlying receivables portfolio, available credit enhancement (in the form of reserve funds and a 34% subordination level), AEON Thana Sinsap (Thailand) Plc's (AEONTS, rated 'BBB+(tha)'/Stable/'F2(tha)') originating and servicing capabilities, and the transaction's financial and legal structures which include a set of early amortisation triggers. The expected rating addresses the likelihood of debenture holders receiving full and timely interest payments and full repayment of principal by the legal final maturity date of 10 May 2015. Interest will be paid on a monthly basis. The Negative Outlook of the debentures reflects the outlook of the International Local Currency Issuer Default Rating (IDR) of Thailand, which caps the debentures' rating. The outlook of Thailand's International Local Currency IDR of 'A-' was revised to Negative from Stable on 19 April 2010, reflecting an escalation in political uncertainty, which could impact the country's sovereign creditworthiness.
"The performances of the previous three credit card ABS transactions originated by AEONTS have been relatively satisfactory," says Orawan Karoonkornsakul, Senior Director in Fitch's Thai Structured Finance team. The debentures of AEONTS' first securitised portfolio were paid-in-full on their expected maturity date in February 2010. Fitch receives historical performance data from AEONTS and uses the information to derive the base case assumptions for key performance parameters of this transaction. The historical data under Fitch's analysis covers the period of weak economic conditions since 2007, which has seen higher delinquencies; these are taken into account in the level of credit enhancement. Fitch will monitor the transactions on a regular basis and as warranted by events.
This transaction represents the fourth securitisation of credit card receivables originated by AEONTS, a Thai consumer finance operator. The debentures will be backed by a portfolio of credit card receivables originated by AEONTS, which will sell the receivables complying with the eligible criteria to Eternal 5 at the closing of the transaction and on a revolving basis. The purchase of receivables by Eternal 5 at closing will be funded by the issuance of the debentures, a seller loan and a subordinated loan. The debentures will be subscribed by investors, while the seller loan and the subordinated loan will be provided by AEONTS.
Eternal 5, a SPC with limited liability established under Thai laws, is expected to be granted special purpose vehicle (SPV) status under Thailand's Securitisation Law. The purchased receivables are expected to have a value of up to THB4.36bn at the initial cut-off date.
The final ratings are contingent upon receipt of final documents conforming to information already received and the SEC's approval of the securitisation programme.
Applicable criteria available on Fitch's website at www.fitchratings.com. For further details, please refer to "Global Structured Finance Rating Criteria," dated September 30, 2009, "Criteria for Structured Finance Loss Severity Ratings", dated February 17, 2009, "Counterparty Criteria for Structured Finance Transactions", dated 22 October 2009, "Criteria to Analyse Legal Uncertainty in Emerging Market Securitisations", dated 10 July 2009, "U.S. Credit Card ABS Rating Criteria", dated 10 March 2008, and "Criteria for Existing Asset Securitisation in Emerging Markets - Sovereign Constraints", dated 17 March 2008.
Contacts: Orawan Karoonkornsakul, Pramook Malasitt, Bangkok, +662 655 4755 or Stan Ho +852 2263 9668, Hong Kong.
Media Relations: Leslie Tan, Singapore, Tel: +65 67 96 7234, Email:
[email protected].
Additional information is available at www.fitchratings.com.