Fitch Upgrades Ek-Chai Distribution System’s Guaranteed Debentures to ‘AAA(tha)’; Outlook Negative

Stocks and Financial Services Press Releases Tuesday March 12, 2013 17:02
Bangkok--12 Mar--Fitch Ratings

Fitch Ratings (Thailand) Limited has upgraded the National Long-Term rating of Ek-Chai Distribution System Company Limited’s (ECDS) debentures due 2015 to ‘AAA(tha)’ from ‘AA+(tha)’. The Outlook is revised to Negative from Stable.

The debentures are guaranteed by UK-based Tesco PLC (Tesco; ‘A-’/Negative), a majority shareholder of ECDS.
Key Rating Drivers

The upgrade follows the agency’s upgrade of the Country Ceiling of the Kingdom of Thailand to ‘A-’ from ‘BBB+’ while the Outlook revision reflects the Outlook of the guarantor’s rating.

The rating of ECDS’s guaranteed debentures is based on the full and irrevocable guarantee provided by Tesco. However, some conditions on the guarantee are subject to transfer and convertibility (T&C) risk and sovereign interventions, which are captured by the Thai sovereign’s Country Ceiling.

Rating Sensitivities
Positive - Future developments that may, individually or collectively, lead to positive rating
action include:
  • A revision of Tesco’s Outlook or an upgrade of its rating.
Negative - Future developments that may, individually or collectively, lead to negative rating
action include:
  • A downgrade of Tesco’s rating.
It should be noted that a one-notch change in an International rating could result in a change in a National Rating of more than one notch.
Primary Analyst
Somruedee Chaiworarat
Associate Director
+66 2108 0160
Fitch Ratings (Thailand) Limited
Level 17, Park Ventures, 57 Wireless Road, Lumpini, Patumwan,
Bangkok 10330, Thailand
Secondary Analyst
Pimrumpai Panyarachun
Associate Director
+66 2108 0161
Committee Chairperson
Vicky Melbourne
Senior Director
+612 8256 0325

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