TRIS Rating Co., Ltd. has assigned the rating of BMW Leasing (Thailand) Co., Ltd.’s (BMWL or Issuer) issue of up to Bt3,000 million in guaranteed debentures at “AAA” with “stable” outlook. The rating reflects the full, unconditional, and irrevocable guarantee by BMW AG (BMW Group or Guarantor), a company rated “A+/Stable” by Standard and Poor’s (S&P) and “A1/Stable” by Moody’s Investors Service (Moody’s). The rating also reflects the BMW Group’s position as one of the leaders in worldwide luxury automobile and motorcycle production, the brand value of BMW Group’s products (BMW, MINI, and Rolls-Royce), the ability to continuously launch new models, and the strong financial profile of BMW Group.
The “stable” outlook reflects the creditworthiness of the Guarantor, BMW AG. The outlook also reflects the BMW Group’s ability to maintain its leading position as a premium car and motorcycle manufacturer in the global market, solid operating cash flows, and a conservative financial policy. The BMW Group is also expected to raise sales and improve the operating profit margin to meet the targets set for 2012.
TRIS Rating reported that the guarantee made by the BMW Group is governed by German law and is unconditional and irrevocable. The guarantee provides for the debenture holders the punctual payment of principal, interest and all other debts outstanding under the debentures. The obligations of the BMW Group under this guarantee rank pari passu with all other present and future unsecured and unsubordinated indebtedness of the Guarantor. All payments of the guaranteed amount shall be made in baht by the Guarantor under this Guarantee without any deduction or withholding.
TRIS Rating said, the strategic focus of BMW Group is the luxury car segment and it has a strong position in this market segment. Its market share in terms of worldwide automobile unit sales was approximately 2.11% in 2007. Its products cover three premium automobile brands: BMW, Mini, and Rolls-Royce. In the first quarter of 2008, the revenue contribution from the automobile business accounted for 70.9% of total revenues while the remainder was from motorcycle sales (2.6%) and financial services (26.0%). Both the automobile and motorcycle businesses are collectively called the Industrial Operations segment. Automobile sales volume in the first quarter of 2008 increased by 5.6% year-on-year (y-o-y); motorcycle sales volume dropped 8.6% while the lease and financing contracts of the Financial Services segment grew by 15.6%. However, first-quarter net profit of BMW Group fell by 17.0% y-o-y due mainly to the subprime financial crisis in the US market, rising raw material prices, and the depreciation of the US dollar against the euro. Under the medium-term plan, the BMW Group announced its 2012 targets for improved sales volume, profitability, and a planned substantial rise in dividend payments. The BMW Group plans to increase automobile sales from 1.374 million units in 2006 to 1.8 million units in 2012 while reducing the capital expenditures ratio from around 8.8% of total sales to less than 7%. In addition, the BMW Group also plans to improve earnings before interest and tax (EBIT) margin of the automobile segment from around 6.4% in 2006 to 8%-10% by the end of 2012.
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Though the EBIT margin of BMW Group in the past two years declined from around 8% in 2004 to 6.4% in 2006 and 2007, its financial profile remains strong. In 2007, the BMW Group was able to achieve a medium-term target as free cash flow from Industrial Operations totalled more than euro 2,000 million per annum. The free cash flow from Industrial Operations grew almost 140% from euro 956 million in 2006 to euro 2,291 million in 2007. Free cash flow from Industrial Operations remained strong in 2008, with 13% y-o-y growth in Q1/2008 to euro 452 million. The total debt to capitalization ratio of Industrial Operations, after adjusting for operating leases and the unfunded portion of defined benefit pension plans, stayed at 37%-43% over the past three years. At the end of Q1/2008, the BMW Group reported the industrial net cash position of Industrial Operations at euro 907 million, with total financial liabilities of euro 1,970 million offset by cash and cash equivalents of euro 2,877 million, said TRIS Rating. -- End (Continue on page 2)
BMW Leasing (Thailand) Co., Ltd. (BMWL)
Issue Rating:
Up to Bt3,000 million guaranteed debentures due 2011 AAA
Rating Outlook: Stable
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Copyright 2008, 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 the creditworthiness of the Guarantor, BMW AG. The outlook also reflects the BMW Group’s ability to maintain its leading position as a premium car and motorcycle manufacturer in the global market, solid operating cash flows, and a conservative financial policy. The BMW Group is also expected to raise sales and improve the operating profit margin to meet the targets set for 2012.
TRIS Rating reported that the guarantee made by the BMW Group is governed by German law and is unconditional and irrevocable. The guarantee provides for the debenture holders the punctual payment of principal, interest and all other debts outstanding under the debentures. The obligations of the BMW Group under this guarantee rank pari passu with all other present and future unsecured and unsubordinated indebtedness of the Guarantor. All payments of the guaranteed amount shall be made in baht by the Guarantor under this Guarantee without any deduction or withholding.
TRIS Rating said, the strategic focus of BMW Group is the luxury car segment and it has a strong position in this market segment. Its market share in terms of worldwide automobile unit sales was approximately 2.11% in 2007. Its products cover three premium automobile brands: BMW, Mini, and Rolls-Royce. In the first quarter of 2008, the revenue contribution from the automobile business accounted for 70.9% of total revenues while the remainder was from motorcycle sales (2.6%) and financial services (26.0%). Both the automobile and motorcycle businesses are collectively called the Industrial Operations segment. Automobile sales volume in the first quarter of 2008 increased by 5.6% year-on-year (y-o-y); motorcycle sales volume dropped 8.6% while the lease and financing contracts of the Financial Services segment grew by 15.6%. However, first-quarter net profit of BMW Group fell by 17.0% y-o-y due mainly to the subprime financial crisis in the US market, rising raw material prices, and the depreciation of the US dollar against the euro. Under the medium-term plan, the BMW Group announced its 2012 targets for improved sales volume, profitability, and a planned substantial rise in dividend payments. The BMW Group plans to increase automobile sales from 1.374 million units in 2006 to 1.8 million units in 2012 while reducing the capital expenditures ratio from around 8.8% of total sales to less than 7%. In addition, the BMW Group also plans to improve earnings before interest and tax (EBIT) margin of the automobile segment from around 6.4% in 2006 to 8%-10% by the end of 2012.
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Though the EBIT margin of BMW Group in the past two years declined from around 8% in 2004 to 6.4% in 2006 and 2007, its financial profile remains strong. In 2007, the BMW Group was able to achieve a medium-term target as free cash flow from Industrial Operations totalled more than euro 2,000 million per annum. The free cash flow from Industrial Operations grew almost 140% from euro 956 million in 2006 to euro 2,291 million in 2007. Free cash flow from Industrial Operations remained strong in 2008, with 13% y-o-y growth in Q1/2008 to euro 452 million. The total debt to capitalization ratio of Industrial Operations, after adjusting for operating leases and the unfunded portion of defined benefit pension plans, stayed at 37%-43% over the past three years. At the end of Q1/2008, the BMW Group reported the industrial net cash position of Industrial Operations at euro 907 million, with total financial liabilities of euro 1,970 million offset by cash and cash equivalents of euro 2,877 million, said TRIS Rating. -- End (Continue on page 2)
BMW Leasing (Thailand) Co., Ltd. (BMWL)
Issue Rating:
Up to Bt3,000 million guaranteed debentures due 2011 AAA
Rating Outlook: Stable
-------------------------------------------------------
Copyright 2008, 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.