TRIS Rating has affirmed the company rating of Siam Panich Leasing PLC (SPL) and the ratings of its existing senior debentures and bills of exchange at "A-" with "stable" outlook. At the same time, TRIS Rating has assigned the ratings of "A-" with "stable" outlook to SPL's proposed up to Bt400 million and up to Bt2,500 million senior debentures. The ratings are based on the strong market position of SPL in the automobile hire purchase market and its experienced management team. However, these strengths are partially offset by intense competition in both the new and used car hire purchase businesses, and higher funding costs from rising interest trends. Moreover, uncertainty regarding Thailand's economic conditions and the continued high oil prices should adversely impact demand for automobile hire purchase.
The "stable" outlook reflects SPL's experienced management team and efficient operating system, enabling the company to maintain both its market position and portfolio growth in line with TRIS Rating's expectations. Moreover, despite the economic slowdown resulting from many negative events, SPL is expected to be able to maintain its profitability and asset quality at an acceptable level.
According to TRIS Rating, SPL reported net interest income of Bt1,021 million for the first half of 2005, 5.7% higher than the Bt966 million recorded for the same period in 2004. However, its net profit declined by 4% because operating expenses rose by 29.2%. The operating expenses to total income ratio, which increased from 17.8% in 2003 to 20.7% in 2004, slightly decreased to 20.3% for the first half of 2005. The total loan portfolio increased by 9.3%, from Bt37,341 million at the end of 2004 to Bt40,829 million at the end of June 2005, which was on track to reach management's 2005 growth target of 20%. New automobile sales for the first nine months of 2005 rose by 15.0% from the same period in 2004, in line with the expected growth rate of 10%-15% for the full year.
TRIS Rating said, SPL has refinanced its short-term loans with longer-term borrowings to better match its asset and liabilities and to mitigate interest rate risk during the uptrend of interest rates. The proceeds from the new debentures will be used to refinance SPL's short-term borrowings. In order to maintain its market position, interest rates charges have not increased relative to funding costs, resulting in a narrower spread. -- End
Company Rating: Affirmed at A- Issue Ratings: 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- SPL074A: Bt500 million senior debentures due 2007 Affirmed at A- SPL075A: Bt1,250 million senior debentures due 2007 Affirmed at A- SPL081A: Bt810 million senior debentures due 2008 Affirmed at A- SPL083A: Bt4,000 million senior debentures due 2008 Affirmed at A- SPL102A: Bt900 million senior debentures due 2010 Affirmed at A- SPL109A: Bt300 million senior debentures due 2010 Affirmed at A- Bt225 million bills of exchange due 2008 Affirmed at A- SPL#7/2005: Up to Bt400 million senior debentures due 2007 A- SPL#8/2005: Up to Bt2,500 million senior debentures due 2006 A- Rating Outlook: Stable
The "stable" outlook reflects SPL's experienced management team and efficient operating system, enabling the company to maintain both its market position and portfolio growth in line with TRIS Rating's expectations. Moreover, despite the economic slowdown resulting from many negative events, SPL is expected to be able to maintain its profitability and asset quality at an acceptable level.
According to TRIS Rating, SPL reported net interest income of Bt1,021 million for the first half of 2005, 5.7% higher than the Bt966 million recorded for the same period in 2004. However, its net profit declined by 4% because operating expenses rose by 29.2%. The operating expenses to total income ratio, which increased from 17.8% in 2003 to 20.7% in 2004, slightly decreased to 20.3% for the first half of 2005. The total loan portfolio increased by 9.3%, from Bt37,341 million at the end of 2004 to Bt40,829 million at the end of June 2005, which was on track to reach management's 2005 growth target of 20%. New automobile sales for the first nine months of 2005 rose by 15.0% from the same period in 2004, in line with the expected growth rate of 10%-15% for the full year.
TRIS Rating said, SPL has refinanced its short-term loans with longer-term borrowings to better match its asset and liabilities and to mitigate interest rate risk during the uptrend of interest rates. The proceeds from the new debentures will be used to refinance SPL's short-term borrowings. In order to maintain its market position, interest rates charges have not increased relative to funding costs, resulting in a narrower spread. -- End
Company Rating: Affirmed at A- Issue Ratings: 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- SPL074A: Bt500 million senior debentures due 2007 Affirmed at A- SPL075A: Bt1,250 million senior debentures due 2007 Affirmed at A- SPL081A: Bt810 million senior debentures due 2008 Affirmed at A- SPL083A: Bt4,000 million senior debentures due 2008 Affirmed at A- SPL102A: Bt900 million senior debentures due 2010 Affirmed at A- SPL109A: Bt300 million senior debentures due 2010 Affirmed at A- Bt225 million bills of exchange due 2008 Affirmed at A- SPL#7/2005: Up to Bt400 million senior debentures due 2007 A- SPL#8/2005: Up to Bt2,500 million senior debentures due 2006 A- Rating Outlook: Stable