TRIS Rating Downgrades Company Rating of “TSFC” to “C” from “BB-” And Maintains “Negative” CreditAlert

TRIS Rating Co., Ltd. has downgraded the company rating of TSFC Securities Ltd. (TSFC) to “C” from “BB-” and has maintained the “CreditAlert” with “negative” implication.

TRIS Rating said that the downgrade follows TSFC Board of Directors’ resolution to enter into the business rehabilitation process under the Bankruptcy Law B.E. 2483 after the company’s failure to meet the Securities and Exchange Commission’s (the SEC) immediate capital injection requirements. The decision makes TSFC most likely to miss payments of its upcoming financial obligations.

The rating will be lowered to “D” once TSFC actually defaults on its upcoming financial obligations.

On 4 November 2008, the SEC ordered TSFC to submit a recapitalization plan to the SEC. On 28 November 2008, after consideration of the recapitalization plan, the SEC required TSFC to submit a Bt279 million immediate capital injection plan in order to ensure that the company’s BIS ratio would meet the minimum requirement of 8%. After TSFC’s failure to fulfill the SEC’s immediate capital injection requirements, the company decided, on 12 December 2008, to seek approval from the SEC to enter into the business rehabilitation process under the Bankruptcy Law B.E. 2483.

The company’s decision indicates that the company is facing severe financial difficulty and cannot pay all financial obligations in full and on time, though the company still has some liquidity, by divesting its investment portfolio, to repay its upcoming financial obligations for a short period.

TRIS Rating previously downgraded TSFC’s rating from “A” to “BBB-” on 7 November 2008, following a significant deterioration of its capital as a result of a sharp drop in the SET Index during October 2008. The rating was further downgraded to “BB-” on 28 November 2008, which reflected high uncertainty of TSFC to fulfill the recapitalization plan. -- End

Company Rating: Downgraded to “C” from “BB-” CreditAlert Designation: NEGATIVE Copyright 2008, 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.

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