TRIS Rating Co., Ltd. has assigned a “A-” rating to the proposed up to Bt500 million senior debentures of Phatra Leasing PLC (PL). At the same time, TRIS Rating has affirmed the company rating and the ratings of PL’s current senior debentures at “A-” The rating outlook is “stable”. The ratings reflect the demonstrated ability of PL’s management to maintain a strong market position in the automobile operating lease business despite increasingly intense competition. The ratings also reflect PL’s good risk management system and conservative underwriting process that have enabled PL to maintain good asset quality during its portfolio expansion. The ratings also take into consideration increasing demand for outsourcing of automobile maintenance activities by corporate. PL’s business and financial performance in FY2006 were a little bit weaker than expectation, following a drop in domestic automobile sales and severe competition of newcomers. Less favourable economic and business environment will continue to be major constraints for PL’s profitability and business expansion in the future.
The “stable” outlook reflects PL’s ability to maintain its leading position in the automobile operating lease business and deliver medium-term performance as expected. The company is likely to retain its existing major clients, as well as expand its customer base while maintaining its good asset quality. However, its profitability is still pressured by intense competition and higher cost of funding.
TRIS Rating reported that PL was able to maintain a market leader position in automobile operating lease business, posing the largest market share of about 30% during 2001-2005 of total leased assets held by 25 large operators in TRIS Rating’s database. Pressured by intense competition and rising oil prices, PL’s leased asset growth and profitability during FY2006 (October 2005-September 2006) were gradually weaker. PL’s average new lease assets continued to decrease to Bt346 million per quarter during FY2005 and to Bt215 million in FY2006, from Bt455 million per quarter during FY2004. However, the new leased assets for the first quarter of FY2007 recovered to Bt525 million.
PL’s net profit was Bt173 million in 2006, down from Bt182 million in 2005. The company’s net profit for the first three months of FY2007 increased to Bt72 million, from Bt45 million the same period last year, as a result of an increase in gains from disposals of leased assets, despite of a decline in rental income from operating lease contracts. PL funded most of its asset growth by borrowing, resulting in high leverage. The company’s ratio of debt to capitalization improved in FY2005-FY2006 due to recapitalization in September 2005 and a downside in its leased assets in FY2006, said TRIS Rating.--End
Phatra Leasing PLC (PL)
Company Rating: Affirmed at A-
Issue Ratings:
PL079A: Bt400 million senior debentures due 2007 Affirmed at A-
PL081A: Bt200 million senior debentures due 2008 Affirmed at A-
PL08OA: Bt400 million senior debentures due 2008 Affirmed at A- A-
PL094A: Bt700 million senior debentures due 2009 Affirmed at A-
PL114A: Bt160 million senior debentures due 2011 Affirmed at A-
Up to Bt500 million senior debentures due 2010 A-
Rating Outlook: Stable
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Copyright 2007, TRIS Rating Co., Ltd. All rights reserved. Any unauthorized use, disclosure, copying, republication, further transmission, dissemination, redistribution or storing for subsequent use for any purpose, in whole or in part, in any form or manner or by any means whatsoever, by any person, of the credit rating reports or information is prohibited. The credit rating is not a statement of fact or a recommendation to buy, sell or hold any debt instruments. It is an expression of opinion regarding credit risks for that instrument or particular company. The opinion expressed in the credit rating does not represent investment or other advice and should therefore not be construed as such. Any rating and information contained in any report written or published by TRIS Rating has been prepared without taking into account any recipient’s particular financial needs, circumstances, knowledge and objectives. Therefore, a recipient should assess the appropriateness of such information before making an investment decision based on this information. Information used for the rating has been obtained by TRIS Rating from the company and other sources believed to be reliable. Therefore, TRIS Rating does not guarantee the accuracy, adequacy, or completeness of any such information and will accept no liability for any loss or damage arising from any inaccuracy, inadequacy or incompleteness. Also, TRIS Rating is not responsible for any errors or omissions, the result obtained from, or any actions taken in reliance upon such information.
The “stable” outlook reflects PL’s ability to maintain its leading position in the automobile operating lease business and deliver medium-term performance as expected. The company is likely to retain its existing major clients, as well as expand its customer base while maintaining its good asset quality. However, its profitability is still pressured by intense competition and higher cost of funding.
TRIS Rating reported that PL was able to maintain a market leader position in automobile operating lease business, posing the largest market share of about 30% during 2001-2005 of total leased assets held by 25 large operators in TRIS Rating’s database. Pressured by intense competition and rising oil prices, PL’s leased asset growth and profitability during FY2006 (October 2005-September 2006) were gradually weaker. PL’s average new lease assets continued to decrease to Bt346 million per quarter during FY2005 and to Bt215 million in FY2006, from Bt455 million per quarter during FY2004. However, the new leased assets for the first quarter of FY2007 recovered to Bt525 million.
PL’s net profit was Bt173 million in 2006, down from Bt182 million in 2005. The company’s net profit for the first three months of FY2007 increased to Bt72 million, from Bt45 million the same period last year, as a result of an increase in gains from disposals of leased assets, despite of a decline in rental income from operating lease contracts. PL funded most of its asset growth by borrowing, resulting in high leverage. The company’s ratio of debt to capitalization improved in FY2005-FY2006 due to recapitalization in September 2005 and a downside in its leased assets in FY2006, said TRIS Rating.--End
Phatra Leasing PLC (PL)
Company Rating: Affirmed at A-
Issue Ratings:
PL079A: Bt400 million senior debentures due 2007 Affirmed at A-
PL081A: Bt200 million senior debentures due 2008 Affirmed at A-
PL08OA: Bt400 million senior debentures due 2008 Affirmed at A- A-
PL094A: Bt700 million senior debentures due 2009 Affirmed at A-
PL114A: Bt160 million senior debentures due 2011 Affirmed at A-
Up to Bt500 million senior debentures due 2010 A-
Rating Outlook: Stable
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Copyright 2007, TRIS Rating Co., Ltd. All rights reserved. Any unauthorized use, disclosure, copying, republication, further transmission, dissemination, redistribution or storing for subsequent use for any purpose, in whole or in part, in any form or manner or by any means whatsoever, by any person, of the credit rating reports or information is prohibited. The credit rating is not a statement of fact or a recommendation to buy, sell or hold any debt instruments. It is an expression of opinion regarding credit risks for that instrument or particular company. The opinion expressed in the credit rating does not represent investment or other advice and should therefore not be construed as such. Any rating and information contained in any report written or published by TRIS Rating has been prepared without taking into account any recipient’s particular financial needs, circumstances, knowledge and objectives. Therefore, a recipient should assess the appropriateness of such information before making an investment decision based on this information. Information used for the rating has been obtained by TRIS Rating from the company and other sources believed to be reliable. Therefore, TRIS Rating does not guarantee the accuracy, adequacy, or completeness of any such information and will accept no liability for any loss or damage arising from any inaccuracy, inadequacy or incompleteness. Also, TRIS Rating is not responsible for any errors or omissions, the result obtained from, or any actions taken in reliance upon such information.