TRIS Rating Co., Ltd. has affirmed the company rating of Siam Panich Leasing PLC (SPL) and the ratings of its senior debentures (Bt3,500 million SPL055A, Bt3,000 million SPL063A, Bt3,500 million SPL073A and Bt3,500 million SPL073B) at "A-". At the same time, TRIS Rating has also assigned the rating of "A-" to SPL's proposed Bt225 bills of exchange (B/E). The ratings are based on SPL's experienced management and its sustained and solid relationships with automobile dealers. The ratings also take into consideration SPL's acceptable asset quality, as well as its strong market position, particularly in the used car hire purchase business. In addition, the ratings are supported by good business prospects in line with higher demand for automobiles and thus a greater need for hire purchase loans. However, these strengths are partially offset by the fierce competitive environment in the automobile hire purchase business, which might limit the company's future profitability.
TRIS Rating reported that the proposed bills of exchange of SPL are of four-year tenure with a total of Bt225 million due in 2008. The bills are issued to fund SPL's business expansion and to manage financial cost. The B/E rank pari passu with all of SPL's other present and future unsecured and unsubordinated indebtedness. However, there are no obligations from the issuer to perform various duties, which are normally included in the indenture of the debentures; therefore, the B/E holders have to closely monitor the issuer's status to protect their rights.
TRIS Rating further reported that for the first quarter of 2004, SPL reported Bt253 million in net profits. Its return on average assets and equity (non-annualized basis) were 0.8% and 4.8%, respectively, while its net interest income to average assets ratio was 1.5%. The company's annualized interest spread still remained higher than 5%. TRIS Rating expects that SPL's profitability in 2004 will be maintained near the performance levels set in 2003. Regarding the company's leverage, the ratios of shareholders' equity to total assets and total loans weakened from 17.0% and 17.4% in 2003 to 14.7% and 15.0% as of March 2004. The lowered ratios were resulted from both growth in assets and decrease in shareholders' equity because SPL paid out Bt498 million in dividends during the first quarter of 2004. SPL's funding structure now better matches its asset structure after it issued debentures worth Bt3,500 million in March 2004, making its ratio of short-term borrowing to total borrowing decrease from 51.7% as of December 2003 to 37.3% as of March 2004. - End
Siam Panich Leasing PLC (SPL) Company Rating: Affirmed at A- Issue Ratings: SPL055A: Bt3,500 million senior debentures due 2005 Affirmed at A- SPL063A: Bt3,000 million senior debentures due 2006 Affirmed at A- SPL073A: Bt3,500 million senior debentures due 2007 Affirmed at A- SPL073B: Bt3,500 million senior debentures due 2007 Affirmed at A- Bt225 million bills of exchange due 2008 A-