TRIS Rating Co., Ltd. has affirmed "AAA" ratings to Bt30,000 million medium-term notes (MTNs) program, including the drawdown Bt6,000 million guaranteed debentures (GECL077A) and the proposed additional draw down up to Bt400 million guaranteed debentures of GE Capital Auto Lease PLC (GECAL), which are guaranteed by its parent company, General Electric Capital Corporation (GECC), a company rated "AAA" and "Aaa" by Standard and Poor's (S&P) and Moody's Investors Service (Moody's), respectively. At the same time, TRIS Rating has cancelled the company rating of GECAL as requested by the company because the company has focused to raise funds through a parent guarantee structure. The rating reflects the unconditional and irrevocable guarantee of the parent company. GECC is wholly owned by General Electric Capital Services, Inc. (GECS), who is a wholly-owned subsidiary of GE Company (GE Company) which is rated "AAA" and "Aaa" by S&P and Moody's, respectively. GE Company's ratings are based on the strength of its stable income, which comes from a diverse range of products that are marketed to a broad cross-section of varied consumers in markets around the world. This diversification provides consistent earnings for the GE Group, of which GECC is a part despite the cyclical nature of individual businesses.
TRIS Rating reported that the guarantee should be noted as being governed by the laws of the State of New York. The guarantee, which is unconditional and irrevocable, provides for punctual payment with waiving notice of acceptance by the guarantor, and provides good protection for debentureholders as the guarantee ensures that the credit risk of this instrument is the same as the credit risk of the senior unsecured debt of the guarantor, GECC. The guarantee cannot be amended or terminated without the consent of the debentureholders' representative. In case of a merger, or consolidation of GECC, the successor of GECC shall assume this guaranteed obligation. However, the enforceability of the guarantee may be limited by bankruptcy, insolvency or liquidation of the guarantor. Furthermore, while this guarantee is governed by the laws of New York State in the United States, the guarantee may be enforced in a court in Thailand. However, a Thai court can only take action with respect to the assets of GECC within its jurisdiction.
TRIS Rating said GECC was incorporated in 1943 in the State of New York, United States. GECC operates in four key operating segments: Commercial Finance, Consumer Finance, Equipment & Other Services, and Insurance. The diverse risk portfolio of products and services that GECC offers to consumers around the world generates highly consistent consolidated profits for the company. Contributions from strong industries and markets can mitigate the impact of results from weak industries and markets. Furthermore, GECC continues to pursue an aggressive acquisition strategy to support integration of its businesses all over the globe. The conservative risk and return analysis on which each new prospective business acquisition is a key factor in GECC's sustainable growth. GECC's total assets on a consolidated basis grew from US$439 billion at the end of 2002 to US$506 billion at the end of 2003. This 15.3% growth was slightly higher than the 15.2% growth the company reached in 2002.
GE Company is contractually committed to maintain the ratios of earnings to fixed charges at GECC at a specified level. Also, GE Company is committed to contribute additional capital to GECC if GECC's leverage ratio (debt to equity) were to exceed 8:1. However during 2003, GECC's parent supported debt was reduced from US$12.5 billion to US$4.6 billion at the end of 2003. The company targets to eliminate of all parent supported debt by 2005. Furthermore, GECC reduced its dividend payments to GECS to 10% of operating earnings in order to retain a greater portion of the company's operating earnings. Through its long-term experience in managing its asset quality in each business segment, GECC has developed an efficient risk management system. GECC continues to maintain good asset quality. The ratio of non-earning and reduced-earning receivables to total financing receivables of the four business segments decreased slightly from 1.9% in 2002 to 1.8% in 2003. The company's allowance for loan losses to total receivables was very low at 2.71% at year-end 2002 and 2.70% at year-end 2003, TRIS Rating said. -- End
GE Capital Auto Lease PLC (GECAL) Issue Ratings: Bt30,000 million guaranteed medium-term notes (MTNs) program Affirmed at AAA
- GECL077A: Bt6,000 million guaranteed debentures due 2007 Affirmed at AAA
- Up to Bt400 million guaranteed debentures due 2008 AAA
TRIS Rating reported that the guarantee should be noted as being governed by the laws of the State of New York. The guarantee, which is unconditional and irrevocable, provides for punctual payment with waiving notice of acceptance by the guarantor, and provides good protection for debentureholders as the guarantee ensures that the credit risk of this instrument is the same as the credit risk of the senior unsecured debt of the guarantor, GECC. The guarantee cannot be amended or terminated without the consent of the debentureholders' representative. In case of a merger, or consolidation of GECC, the successor of GECC shall assume this guaranteed obligation. However, the enforceability of the guarantee may be limited by bankruptcy, insolvency or liquidation of the guarantor. Furthermore, while this guarantee is governed by the laws of New York State in the United States, the guarantee may be enforced in a court in Thailand. However, a Thai court can only take action with respect to the assets of GECC within its jurisdiction.
TRIS Rating said GECC was incorporated in 1943 in the State of New York, United States. GECC operates in four key operating segments: Commercial Finance, Consumer Finance, Equipment & Other Services, and Insurance. The diverse risk portfolio of products and services that GECC offers to consumers around the world generates highly consistent consolidated profits for the company. Contributions from strong industries and markets can mitigate the impact of results from weak industries and markets. Furthermore, GECC continues to pursue an aggressive acquisition strategy to support integration of its businesses all over the globe. The conservative risk and return analysis on which each new prospective business acquisition is a key factor in GECC's sustainable growth. GECC's total assets on a consolidated basis grew from US$439 billion at the end of 2002 to US$506 billion at the end of 2003. This 15.3% growth was slightly higher than the 15.2% growth the company reached in 2002.
GE Company is contractually committed to maintain the ratios of earnings to fixed charges at GECC at a specified level. Also, GE Company is committed to contribute additional capital to GECC if GECC's leverage ratio (debt to equity) were to exceed 8:1. However during 2003, GECC's parent supported debt was reduced from US$12.5 billion to US$4.6 billion at the end of 2003. The company targets to eliminate of all parent supported debt by 2005. Furthermore, GECC reduced its dividend payments to GECS to 10% of operating earnings in order to retain a greater portion of the company's operating earnings. Through its long-term experience in managing its asset quality in each business segment, GECC has developed an efficient risk management system. GECC continues to maintain good asset quality. The ratio of non-earning and reduced-earning receivables to total financing receivables of the four business segments decreased slightly from 1.9% in 2002 to 1.8% in 2003. The company's allowance for loan losses to total receivables was very low at 2.71% at year-end 2002 and 2.70% at year-end 2003, TRIS Rating said. -- End
GE Capital Auto Lease PLC (GECAL) Issue Ratings: Bt30,000 million guaranteed medium-term notes (MTNs) program Affirmed at AAA
- GECL077A: Bt6,000 million guaranteed debentures due 2007 Affirmed at AAA
- Up to Bt400 million guaranteed debentures due 2008 AAA