Thai Rating and Information Services Co., Ltd. (TRIS) announced that it has affirmed the company rating of GE Capital Auto Lease PLC (GECAL) and the ratings of GECAL's two issues of senior debentures at "A+". The ratings continue to reflect the strong growth of GECAL's hire purchase business. The ratings also take into account the significant increase in financial support from the company's ultimate parent firm, General Electric Capital Corporation (GECC). However, these strengths are partially offset by GECAL's high leverage status and intense competition in the hire purchase market for new cars.
TRIS reported that GECAL's main focus continues to be new car financing, although its used car financing business is expanding substantially. Overall hire purchase receivables grew 92.2% in 2000 to Bt23,917 million. Comparing the first nine months of 2001 with the same period the previous year, GECAL's hire purchase receivables grew 41.9% to Bt28,447 million. Since 2000, GECAL has heavily used funding from its parent to finance its asset expansion, which has enable the company to have competitive costs. GECC increased the revolving credit line to GECAL from US$130 million in 1997 to US$600 million in early 2001 and extended an equity line in the form of subordinated debt from US$10 million in 1997 to US$40 million in the third quarter of 2001. Substantial funds from its parent enhanced GECAL's liquidity, flexibility and capital adequacy. GECAL has carefully matched its sources and uses of funds in line with the asset-liability management standards of its parent.
TRIS said price competition in the hire purchase market is currently challenging GECAL's business. In 2002, GECC plans to set up a new funding structure for its subsidiaries in Thailand. This new structure will be responsible for securing funds either from its parent or external sources for all GE companies operating in Thailand. Through this holding company, GECC's credit strength could lower funding costs of GECAL.
GECAL has continuously used GECC's asset quality management system. Non-accrual loans to average loans dropped from 0.96% in 1999 to 0.91% in 2000. GECAL's net profit rose from Bt230 million in 2000 to Bt520 million for the first nine months of 2001. However, while its assets rapidly increased, its retained earnings have not matched that growth, weakening the leverage ratio. GECAL's shareholders' equity to total assets ratio declined from 8.96% in 1999 to 5.67% in 2000, TRIS said.
GE Capital Auto Lease PLC (GECAL) Company Rating: Affirmed at A+ Issue Ratings: GECAL#1: Bt5,000 million senior debentures due 2003 Affirmed at A+ GECAL#2: Bt5,000 million senior debentures due 2002 Affirmed at A+
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TRIS reported that GECAL's main focus continues to be new car financing, although its used car financing business is expanding substantially. Overall hire purchase receivables grew 92.2% in 2000 to Bt23,917 million. Comparing the first nine months of 2001 with the same period the previous year, GECAL's hire purchase receivables grew 41.9% to Bt28,447 million. Since 2000, GECAL has heavily used funding from its parent to finance its asset expansion, which has enable the company to have competitive costs. GECC increased the revolving credit line to GECAL from US$130 million in 1997 to US$600 million in early 2001 and extended an equity line in the form of subordinated debt from US$10 million in 1997 to US$40 million in the third quarter of 2001. Substantial funds from its parent enhanced GECAL's liquidity, flexibility and capital adequacy. GECAL has carefully matched its sources and uses of funds in line with the asset-liability management standards of its parent.
TRIS said price competition in the hire purchase market is currently challenging GECAL's business. In 2002, GECC plans to set up a new funding structure for its subsidiaries in Thailand. This new structure will be responsible for securing funds either from its parent or external sources for all GE companies operating in Thailand. Through this holding company, GECC's credit strength could lower funding costs of GECAL.
GECAL has continuously used GECC's asset quality management system. Non-accrual loans to average loans dropped from 0.96% in 1999 to 0.91% in 2000. GECAL's net profit rose from Bt230 million in 2000 to Bt520 million for the first nine months of 2001. However, while its assets rapidly increased, its retained earnings have not matched that growth, weakening the leverage ratio. GECAL's shareholders' equity to total assets ratio declined from 8.96% in 1999 to 5.67% in 2000, TRIS said.
GE Capital Auto Lease PLC (GECAL) Company Rating: Affirmed at A+ Issue Ratings: GECAL#1: Bt5,000 million senior debentures due 2003 Affirmed at A+ GECAL#2: Bt5,000 million senior debentures due 2002 Affirmed at A+
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