Bangkok--30 Jul--Fitch Ratings
Fitch Ratings (Thailand) Limited has today released its 2009 Thailand National Ratings Transition Study. The study found that 2009 is the first year where the number of downgrades outnumbered upgrades in the agency’s Thailand National Ratings history. Nonetheless, the study also found that the majority of ratings have so far remained stable through this economic downturn.
The study includes all publicly-rated corporates, banks and non-bank financial institutions (altogether referred to as ‘corporate finance’) since Fitch began assigning National Ratings in Thailand in 2001. This report also shows transition rates for structured finance transactions in a separate section.
For corporate finance, Fitch downgraded three issuers (all non-financial issuers) and recorded no upgrades in 2009, as weak economic conditions prevailed since 2008.
“All downgrades in 2009 were in the corporate sector, while the banking sector has held up relatively well despite the weak operating environment, mainly due to the banks’ strong capital, liquidity and profit margins,” said Vincent Milton, Managing Director of Fitch Thailand.
“While the performance of Fitch-rated Thai structured finance transactions in 2009 proved to be resilient despite the distress in other structured finance markets and a weak economic environment, the recent political unrest could impact the performance of credit card and auto asset-backed securities in 2010 due to business interruption and loss of employment for certain groups of obligors,” said Orawan Karoonkornsakul, Senior Director in Fitch’s Structured Finance ratings team in Thailand.
The transition study showed that there were no defaults in Fitch’s National Rating universe in Thailand, due in part to the relatively short rating history and limited size of the Thai bond market. At year-end 2009, Fitch maintained 40 outstanding National Ratings on corporate finance and 10 outstanding National Ratings on structured finance transactions in Thailand.
Fitch’s new study provides data and analysis on the performance of the agency’s National Ratings in 2009 and over the longer term, capturing the period 2002 to 2009.
The study entitled, “Fitch Thailand National Ratings 2009 Transition Study”, is available on Fitch’s web site under Credit Market Research.
Contacts: Orawan Karoonkornsakul, Vincent Milton, Bangkok, +662 655 4755 or Charlotte Needham +1-212-908-0794, New York