PRESS RELEASE:Fitch: Gulf Cogeneration Guaranteed Bonds 'AAA'
Fitch Ratings-Bangkok/Singapore-30 June 2009: Fitch Ratings (Thailand) Limited
has today upgraded the National Long-term ratings for the two tranches of
amortising and guaranteed debentures issued by Gulf Cogeneration Company Limited
(GCC) to 'AAA(tha)' from 'AA+(tha)'. This includes the five-year tranche of
THB1.16bn and the 10-year tranche of THB2.9bn, maturing April 2011 and April
2016, respectively. The Outlook remains Stable.
The upgrades follow the recalibrating of the mapping between the National and
International rating scales and the broad review of all National ratings under
Fitch Ratings (Thailand)'s coverage in order to maintain consistency between the
two rating scales.
The ratings of the debentures are based entirely on the irrevocable and
unconditional guarantee of the principal and interest payment of the debentures
by Ireland-based DEPFA BANK plc (DEPFA, 'A-'/Stable). Bondholders should note
that the guarantee does not include additional interest, that is the difference
between the debenture interest rate and the debenture default interest rate on
the unpaid principal and interest, in case of a default. However, this will be
mitigated by a reserve fund of THB5.0m. Bondholders may receive payment in
Japanese Yen from the guarantor in the event that the Bank of Thailand imposes
exchange controls that restrict a conversion to Thai baht.
In October 2007, Hypo Real Estate Holding AG (HRE, 'A-'/Stable) acquired
DEPFA. DEPFA's Long- and Short-term IDRs and Support Rating are aligned with
HRE's ratings, which reflect the extremely high likelihood of continued
sovereign support and the strong linkages between HRE's operating companies.
Through a public offer and capital increase, the Federal Republic of Germany (
FRG), acting through the German Financial Markets Stabilisation Fund (SoFFin),
acquired 90% of HRE.
Fitch understands that SoFFin intends to squeeze out HRE's minority
shareholders to gain full control of the group, and that HRE will proceed with
its restructuring which was initiated in late-2008. As announced earlier, the
group's organisational structure was further streamlined with the legal merger
of Depfa Deutsche Pfandbriefbank AG into Hypo Real Estate Bank AG on 29 June
2009; the merged entity was renamed to Deutsche Pfandbriefbank AG and represents
the group's core bank, combining strategic assets and conducting new business
activities (public finance and real estate lending with a focus on Europe and
Germany, to the extent it can be predominantly funded by Pfandbrief). DEPFA
manages the group's non-core activities including the infrastructure finance,
capital markets and trading businesses, which will be gradually reduced and run-
off. On 22 June 2009, HRE announced it would examine possibilities for
transferring significant portions of its problem loans and its non-strategic
portfolio to a wind-down institute.
DEPFA ran into liquidity problems in late 2008 as counterparties' confidence
in the bank swiftly waned following the bankruptcy of Lehman Brothers Holding
Inc. Liquidity support for HRE group provided by FRG, SoFFin, and a consortium
of financial institutions totalled EUR100bn at end-March 2009.
Contacts: Obboon Thirachit, Lertchai Kochareonrattanakul, Vincent Milton,
Bangkok, +662 655 4755; Simone Brehmer, Frankfurt, +49 69 768076 263.
Media Relations: Shivani Sundralingam, Singapore, Tel: + 65 6796 7215, Email:
shivani.sundralingam@fitchratings.com.
Note to Editors: Fitch's National ratings provide a relative measure of
creditworthiness for rated entities in countries with sub- or low-investment
grade international sovereign ratings. The best risk within a country is rated
'AAA' and other credits are rated only relative to this risk. National ratings
are designed for use mainly by local investors in local markets and are
signified by the addition of an identifier for the country concerned, such as
'AAA(tha)' for National ratings in Thailand. Specific letter grades are not
therefore internationally comparable.
Fitch's rating definitions and the terms of use of such ratings are available
on the agency's public site, www.fitchratings.com. Published ratings, criteria
and methodologies are available from this site, at all times. Fitch's code of
conduct, confidentiality, conflicts of interest, affiliate firewall, compliance
and other relevant policies and procedures are also available from the 'Code of
Conduct' section of this site.
(END) Dow Jones Newswires
06-30-090638ET
Copyright (c) 2009 Dow Jones & Company, Inc.
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