TRIS Rating Co., Ltd. has assigned “AAA” ratings to proposed Honda Leasing (Thailand) Co., Ltd.’s (HLTC or Issuer) two proposed guaranteed debentures totalling Bt2,500 million with tenors of 1.5 years and 3 years.
At the same time, TRIS Rating has also affirmed the “AAA” rating for HLTC’s Bt2,000 million guaranteed debentures (HLTC07OA). All debentures are issued under the medium-term debenture programs.
The rating outlook remains “stable”.
These debentures are guaranteed by the Issuer’s parent company, Honda Automobile (Thailand)
Co., Ltd. (HATC or Guarantor), which is a subsidiary of Honda Motor Co., Ltd. (HMC), a company rated “A+/Stable” by Standard and Poor’s (S&P) and “A1/Positive” by Moody’s Investors Service (Moody’s).
TRIS Rating reported that the rating of HLTC’s debentures reflects the unconditional and irrevocable guarantee by HATC, whose creditworthiness is enhanced by the HATC’s keep well agreement with provided by its
ultimate parent, HMC. TRIS Rating takes into consideration the keep well agreement between HATC
and HMC, the strategic importance of HATC as a subsidiary of HMC, and the strengths of HATC in
terms of its competitive position in the Thai automotive industry, healthy financial profile, and
proven ability to meet the global standard of the Honda Group. Although HATC’s strengths are partially offset by
its limited product line, because of the strategy to focus on passenger car and sport utility vehicle
(SUV) segments.
The “stable” outlook of the guaranteed debentures of HLTC reflects the credit profile of its
ultimate parent company, HMC, which receives “A+/Stable” and “A1/Positive” ratings from
S&P and Moody’s, respectively.
TRIS Rating said, under the keep well agreement, which is governed by Japanese law, HMC, the
ultimate parent company of HATC, shall: (1) own and hold, directly and indirectly, the legal title to
and beneficial interest in, at least 80% of all the issued and outstanding shares of stock of HATC;
(2) cause HATC to have a positive consolidated tangible net worth; and, (3) ensure that HATC has
sufficient liquidity and funds to punctually meet its payment obligations associated with the debt
described in the keep well agreement. In addition, any claims on HMC arising from any funds provided
by HMC to HATC are subordinated to the claims of debenture holders. So long as any debt
shall be outstanding, this agreement shall not be modified, amended or terminated in any manner
which may have any adverse effect upon the debenture holders unless the debenture holders
and the representatives of the debenture holders have consented thereto in writing. Though the
keep well agreement is not a guarantee, TRIS Rating believes that with the high credit quality of
HMC and the strategic importance of HATC to HMC, HMC will provide sufficient financial
support to HATC to ensure that all of the HATC’s obligations are met. -- End
Honda Leasing (Thailand) Co., Ltd. (HLTC)
Issue Ratings:
Guaranteed debentures under medium-term debenture programs:
- HLTC07OA: Bt2,000 million guaranteed debentures due 2007 Affirmed at AAA
- Up to Bt2,500 million guaranteed debentures due within 2009 AAA
Rating Outlook: Stable
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Copyright 2006, TRIS Rating Co., Ltd. All rights reserved. Any unauthorized use, disclosure, copying, republication, further transmission, dissemination, redistribution or storing for subsequent use for any purpose, in whole or in part, in any form or manner or by any means whatsoever, by any person, of the credit rating reports or information is prohibited. The credit rating is not a statement of fact or a recommendation to buy, sell or hold any debt instruments. It is an expression of opinion regarding credit risks for that instrument or particular company. The opinion expressed in the credit rating does not represent investment or other advice and should therefore not be construed as such. Any rating and information contained in any report written or published by TRIS Rating has been prepared without taking into account any recipient’s particular financial needs, circumstances, knowledge and objectives. Therefore, a recipient should assess the appropriateness of such information before making an investment decision based on this information. Information used for the rating has been obtained by TRIS Rating from the company and other sources believed to be reliable. Therefore, TRIS Rating does not guarantee the accuracy, adequacy, or completeness of any such information and will accept no liability for any loss or damage arising from any inaccuracy, inadequacy or incompleteness. Also, TRIS Rating is not responsible for any errors or omissions, the result obtained from, or any actions taken in reliance upon such information.
At the same time, TRIS Rating has also affirmed the “AAA” rating for HLTC’s Bt2,000 million guaranteed debentures (HLTC07OA). All debentures are issued under the medium-term debenture programs.
The rating outlook remains “stable”.
These debentures are guaranteed by the Issuer’s parent company, Honda Automobile (Thailand)
Co., Ltd. (HATC or Guarantor), which is a subsidiary of Honda Motor Co., Ltd. (HMC), a company rated “A+/Stable” by Standard and Poor’s (S&P) and “A1/Positive” by Moody’s Investors Service (Moody’s).
TRIS Rating reported that the rating of HLTC’s debentures reflects the unconditional and irrevocable guarantee by HATC, whose creditworthiness is enhanced by the HATC’s keep well agreement with provided by its
ultimate parent, HMC. TRIS Rating takes into consideration the keep well agreement between HATC
and HMC, the strategic importance of HATC as a subsidiary of HMC, and the strengths of HATC in
terms of its competitive position in the Thai automotive industry, healthy financial profile, and
proven ability to meet the global standard of the Honda Group. Although HATC’s strengths are partially offset by
its limited product line, because of the strategy to focus on passenger car and sport utility vehicle
(SUV) segments.
The “stable” outlook of the guaranteed debentures of HLTC reflects the credit profile of its
ultimate parent company, HMC, which receives “A+/Stable” and “A1/Positive” ratings from
S&P and Moody’s, respectively.
TRIS Rating said, under the keep well agreement, which is governed by Japanese law, HMC, the
ultimate parent company of HATC, shall: (1) own and hold, directly and indirectly, the legal title to
and beneficial interest in, at least 80% of all the issued and outstanding shares of stock of HATC;
(2) cause HATC to have a positive consolidated tangible net worth; and, (3) ensure that HATC has
sufficient liquidity and funds to punctually meet its payment obligations associated with the debt
described in the keep well agreement. In addition, any claims on HMC arising from any funds provided
by HMC to HATC are subordinated to the claims of debenture holders. So long as any debt
shall be outstanding, this agreement shall not be modified, amended or terminated in any manner
which may have any adverse effect upon the debenture holders unless the debenture holders
and the representatives of the debenture holders have consented thereto in writing. Though the
keep well agreement is not a guarantee, TRIS Rating believes that with the high credit quality of
HMC and the strategic importance of HATC to HMC, HMC will provide sufficient financial
support to HATC to ensure that all of the HATC’s obligations are met. -- End
Honda Leasing (Thailand) Co., Ltd. (HLTC)
Issue Ratings:
Guaranteed debentures under medium-term debenture programs:
- HLTC07OA: Bt2,000 million guaranteed debentures due 2007 Affirmed at AAA
- Up to Bt2,500 million guaranteed debentures due within 2009 AAA
Rating Outlook: Stable
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Copyright 2006, TRIS Rating Co., Ltd. All rights reserved. Any unauthorized use, disclosure, copying, republication, further transmission, dissemination, redistribution or storing for subsequent use for any purpose, in whole or in part, in any form or manner or by any means whatsoever, by any person, of the credit rating reports or information is prohibited. The credit rating is not a statement of fact or a recommendation to buy, sell or hold any debt instruments. It is an expression of opinion regarding credit risks for that instrument or particular company. The opinion expressed in the credit rating does not represent investment or other advice and should therefore not be construed as such. Any rating and information contained in any report written or published by TRIS Rating has been prepared without taking into account any recipient’s particular financial needs, circumstances, knowledge and objectives. Therefore, a recipient should assess the appropriateness of such information before making an investment decision based on this information. Information used for the rating has been obtained by TRIS Rating from the company and other sources believed to be reliable. Therefore, TRIS Rating does not guarantee the accuracy, adequacy, or completeness of any such information and will accept no liability for any loss or damage arising from any inaccuracy, inadequacy or incompleteness. Also, TRIS Rating is not responsible for any errors or omissions, the result obtained from, or any actions taken in reliance upon such information.