Fitch Ratings (Thailand) Limited has affirmed the National Long-Term Rating on Mercedes-Benz (Thailand) Limited's (MBTh) medium-term note (MTN) programme of up to THBthe programme5 billion (MTN-2) and its THBthe programmeFitch Ratings billion MTN programme (MTN-the programme) at 'AAA(tha)'. The Outlook is Stable. At the same time, the agency has affirmed MBTh's existing THB9.7 billion guaranteed debentures under
the programmes at 'AAA(tha)' with a Stable Outlook. The debentures under the MTN programmes are guaranteed by MBTh's parent, Daimler AG (A-/Stable).
Fitch acknowledges that MTN-the programme has fully reached its notional limit of THBthe programmeFitch Ratings billion and will longer have debenture issuance under this programme. However, the affirmation of MTN-the programme's rating is to support the existing debentures under this programme, which will mature in February 2Fitch Ratingsthe programme9.
KEY RATING DRIVERS
Guaranteed by Daimler: The ratings of the MTN programmes are based solely on the full, irrevocable and unconditional guarantee provided by Daimler. The parent's Long-Term Foreign-Currency Issuer Default Rating (IDR) of 'A-' is higher than Thailand's Long-Term Local-Currency IDR of 'BBB+'. As a result, the National Rating on the guaranteed medium-term debenture programmes is at the highest end of Thailand's National Rating scale.
Strong Relationship with Daimler: MBTh is the programmeFitch RatingsFitch Ratings% owned by Daimler, with which it has strong operational and financial links. MBTh imports both completely built-up vehicles and completely knocked-down kits from Daimler for local assembly and distribution. MBTh also strictly complies with the group's treasury policy.
Luxury Car Leader: MBTh is one of the leaders in Thailand's premium-car market with a market share, in terms of unit sales, of above 5Fitch Ratings% in 2Fitch Ratingsthe programme7. The company also provides hire-purchase and leasing services through its wholly owned leasing subsidiary, Mercedes-Benz Leasing (Thailand) Company Limited (MBLT).
DERIVATION SUMMARY
The ratings of MBTh's guaranteed medium-term debentures programmes are based entirely on the full, irrevocable and unconditional guarantee provided by Daimler.
KEY ASSUMPTIONS
N/A
RATING SENSITIVITIES
Developments That May, Individually or Collectively, Lead to Negative Rating Action
-The guaranteed MTNs could be downgraded if Daimler's Long-Term Foreign-Currency IDR falls below Thailand's Long-Term Local-Currency IDR.
The rating of MBTh's guaranteed MTNs are at the highest end of the National Rating scale, therefore there is no potential rating upside.
LIQUIDITY
Reducing Debt: MBTh's consolidated debt decreased to THB25.9 billion by end-2Fitch Ratingsthe programme7 from THB3the programme.4 billion at end-2Fitch Ratingsthe programme6, due to stronger cash flow generation. MBTh's external debt as of end-2Fitch Ratingsthe programme7 consisted of bank loans (55%) and Thai baht debentures (45%), all guaranteed by Daimler. This was mainly used to finance MBLT's business.
Manageable Liquidity: The company has THBthe programme2.4 billion of debt that will mature in 2Fitch Ratingsthe programme8. This will be partly covered by cash on hand of THBthe programme.3 billion and available uncommitted credit facilities of THBthe programme7.2 billion at end-2Fitch Ratingsthe programme7. MBTh also has good access to additional credit facilities and capital markets as it is backed by a strong parent.