Fitch Assigns Mercedes-Benz (Thailand)#s MTN Programme #AAA(tha)# Rating

Stocks and Financial Services Press Releases Wednesday November 6, 2019 16:24
Bangkok--6 Nov--Fitch Ratings

Fitch Ratings-Bangkok-06 November 2019: Fitch Ratings (Thailand) Limited has assigned Mercedes-Benz (Thailand) Limited's (MBTh) new guaranteed medium-term debenture (MTN) programme of up to THB20 billion a final National Long-Term Rating of 'AAA(tha)'. The Outlook is Stable.

The debentures under the MTN programme are guaranteed by MBTh's ultimate parent, Daimler AG (A-/Stable). A change in Fitch's assessment of the credit quality of Daimler would result in a change in the rating on MBTh's debentures issued under its MTN programme. The final rating follows the receipt of documents conforming to information already received and is in line with the expected rating assigned on 17 October 2019.

KEY RATING DRIVERS

Guaranteed by Daimler: The rating of the MTN programme is based solely on the full, irrevocable and unconditional guarantee provided by Daimler. The guarantee ranks pari-passu with all other unsecured and unsubordinated creditors of Daimler. Daimler's senior unsecured notes are rated at the same level as its Long-Term Foreign-Currency Issuer Default Rating (IDR) of 'A-', which is higher than Thailand's Long-Term Local-Currency IDR of 'BBB+'. As a result, the National Rating on the guaranteed medium-term debenture programme is at the highest end of Thailand's National Rating scale.

DERIVATION SUMMARY
The rating of MBTh's MTN programme is based entirely on the full, irrevocable and unconditional guarantee provided by Daimler.
KEY ASSUMPTIONS
Not applicable
RATING SENSITIVITIES
Developments That May, Individually or Collectively, Lead to Positive Rating Action
  • The rating of MBTh's guaranteed MTN programme is at the highest end of the National Rating scale, therefore there is no potential rating upside.
Developments That May, Individually or Collectively, Lead to Negative Rating Action
  • The guaranteed MTN programme could be downgraded if Daimler's Long-Term Foreign-Currency IDR falls below Thailand's Long-Term Local-Currency IDR.
LIQUIDITY

Manageable Liquidity: MBTh's external debt as of end-2018 consisted of bank loans (72%) and Thai baht debentures (28%), all guaranteed by Daimler. Of this, THB16.7 billion of debt will mature in 2019, and is partly covered by cash on hand of THB555 million and available uncommitted credit facilities of THB9.7 billion at end-2018. MBTh also has good access to additional credit facilities and capital markets as it is backed by a strong parent. The company's debt is mainly used to fund its financial service business.


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