TRIS Rating Co., Ltd. has affirmed "AAA" ratings to the Bt6,500 million (UTT07DA) and Bt4,000 million (UTT083A) guaranteed debentures of Unilever Thai Trading Ltd. (UTT or Issuer). These debentures are guaranteed by UTT's ultimate parent company, Unilever N.V., (Guarantor) a company rated "A+" and "A1" by Standard & Poor's and Moody's, respectively. The issue ratings continue to reflect the credit quality of the Guarantor. Although the Guarantor shall not be liable for the guaranteed debentures in the event that the Issuer is prevented from the punctual payment of any moneys payable because of the intervention of any Thai government agency or the expropriation or nationalization of the assets of the Issuer, TRIS Rating believes that such events are highly unlikely.
TRIS Rating said that under the guarantee agreement, the Guarantor irrevocably and unconditionally guarantees to make full and punctual payment of any amount due as if it were the principal debtor. However, the Guarantor will not be liable to pay any amount pursuant to this guarantee to the extent that the Issuer's failure to pay has resulted from the occurrence of: any intervention by any government agency of Thailand that prevents such payment by causing the Issuer to be unable to transfer money or to convert foreign currency to the currency of payment, the expropriation or nationalization by any government agency of Thailand of any of the assets of the issuer or its subsidiaries for a certain amount and the transfer by intervention from any government agency of Thailand to an entity that is not a member of the Guarantor's group. The guarantee's terms, which specify the unconditional and irrevocable payment with waiving notice of acceptance by the Guarantor, will continue and remain in operation until all moneys owed by the Issuer in respect of the debentures is paid. The guarantee agreement is governed by the laws of England.
TRIS Rating said, Unilever N.V. is a public company registered in the Netherlands, while Unilever PLC is a public company registered in England (together the two parent companies are referred to as the "Unilever Group" or simply "Unilever"). The two companies practically operate as a single entity. With the same directors and linked by a series of agreements, they are currently viewed to have equal credit standings, "A+" and "A1" from Standard & Poor's and Moody's, respectively. Unilever's ratings reflect its diversified leading brand portfolio and geographic diversity. The ratings also take into account the strength of Unilever's distribution channels in high growth, developing markets. Its strong stable cash flow and its improving financial profile are also factored into the ratings. Nevertheless, all the supporting factors are mainly offset by the company's continued high financial leverage following the Bestfoods acquisition. The supporting factors are also considered to be offset by slow growth rates in Unilever's mature markets and intensified competition in the worldwide consumer products industry, which challenges Unilever to sustain its market shares and margins.
Unilever maintained credit ratings of "AAA" and "Aaa" from Standard &Poor's and Moody's, respectively, for a long time before being downgraded to "A+" and "A1" in 2000 because of high leverage and weakening cash flow adequacy following a number of acquisitions in 2000, especially the debt-financed acquisition of Bestfoods. Since the acquisitions, the company was able to repay its debt from operating cash flow and asset disposal. However, its total debt as a percentage of capitalization remained over 70% at the end of 2003, which is considered high. Given that there are no additional major acquisitions, the company's ratings are not expected to change, said TRIS Rating.-- End
Unilever Thai Trading Ltd. (UTT)
Issue Ratings:
UTT07DA: Bt6,500 million guaranteed debentures due 2007 Affirmed at AAA
UTT083A: Bt4,000 million guaranteed debentures due 2008 Affirmed at AAA
TRIS Rating said that under the guarantee agreement, the Guarantor irrevocably and unconditionally guarantees to make full and punctual payment of any amount due as if it were the principal debtor. However, the Guarantor will not be liable to pay any amount pursuant to this guarantee to the extent that the Issuer's failure to pay has resulted from the occurrence of: any intervention by any government agency of Thailand that prevents such payment by causing the Issuer to be unable to transfer money or to convert foreign currency to the currency of payment, the expropriation or nationalization by any government agency of Thailand of any of the assets of the issuer or its subsidiaries for a certain amount and the transfer by intervention from any government agency of Thailand to an entity that is not a member of the Guarantor's group. The guarantee's terms, which specify the unconditional and irrevocable payment with waiving notice of acceptance by the Guarantor, will continue and remain in operation until all moneys owed by the Issuer in respect of the debentures is paid. The guarantee agreement is governed by the laws of England.
TRIS Rating said, Unilever N.V. is a public company registered in the Netherlands, while Unilever PLC is a public company registered in England (together the two parent companies are referred to as the "Unilever Group" or simply "Unilever"). The two companies practically operate as a single entity. With the same directors and linked by a series of agreements, they are currently viewed to have equal credit standings, "A+" and "A1" from Standard & Poor's and Moody's, respectively. Unilever's ratings reflect its diversified leading brand portfolio and geographic diversity. The ratings also take into account the strength of Unilever's distribution channels in high growth, developing markets. Its strong stable cash flow and its improving financial profile are also factored into the ratings. Nevertheless, all the supporting factors are mainly offset by the company's continued high financial leverage following the Bestfoods acquisition. The supporting factors are also considered to be offset by slow growth rates in Unilever's mature markets and intensified competition in the worldwide consumer products industry, which challenges Unilever to sustain its market shares and margins.
Unilever maintained credit ratings of "AAA" and "Aaa" from Standard &Poor's and Moody's, respectively, for a long time before being downgraded to "A+" and "A1" in 2000 because of high leverage and weakening cash flow adequacy following a number of acquisitions in 2000, especially the debt-financed acquisition of Bestfoods. Since the acquisitions, the company was able to repay its debt from operating cash flow and asset disposal. However, its total debt as a percentage of capitalization remained over 70% at the end of 2003, which is considered high. Given that there are no additional major acquisitions, the company's ratings are not expected to change, said TRIS Rating.-- End
Unilever Thai Trading Ltd. (UTT)
Issue Ratings:
UTT07DA: Bt6,500 million guaranteed debentures due 2007 Affirmed at AAA
UTT083A: Bt4,000 million guaranteed debentures due 2008 Affirmed at AAA