Fitch Affirms Krungthep Land’s Guaranteed Notes at ‘AA+(tha)’

Monday 29 August 2011 13:59
Fitch Rating (Thailand) Limited has affirmed Krungthep Land Public Company Limited’s (KLAND) debentures with three different maturities as follows:

THB500m debentures due 2013 at ‘AA+(tha)’; Outlook Stable

THB250m debentures due 2014 at ‘AA+(tha)’; Outlook Stable

THB250m debentures due 2015 at ‘AA+(tha)’; Outlook Stable

The ratings are based solely on the irrevocable and unconditional guarantee of the principal and interest payment of the debentures by Krung Thai Bank Public Company Limited (KTB, ‘AA+(tha)’/ Stable). The guarantee also includes other expenses relating to the notes of up to THB50m.

Any changes to KTB’s National Long-term Rating will affect the National Ratings of KLAND’s debentures.

KTB’s rating is primarily based on its government ownership and support. Its major shareholder is Bank of Thailand’s Financial Institutions Development Fund, with a 55% stake. Fitch believes there is a high probability KTB would receive state support if needed, due to its size and importance to the country’s financial system and economy as well as its majority state-ownership and control. KTB is Thailand’s second-largest bank with a 18.5% market share.

Founded in 1984, KLAND initially focused on developing medium- to high-end single detached house projects. KLAND later expanded into condominiums by entering into a joint venture with Frasers (Thailand) Pte Ltd. (a 100%-owned unit of Frasers Centrepoint Limited (FCL), one of Singapore’s largest residential developers) to develop its first condominium project. The company has also diversified into development of townhouses. FCL became KLAND’s major shareholder via Frasers (Thailand) Pte Ltd. in 2005 and currently holds 40% of KLAND’s shares. Property Perfect Public Company Limited holds 20% of KLAND’s shares while the remaining 40% is mainly owned by Thai entrepreneurs.