Bangkok--13 Sep--TRIS Rating
TRIS Rating Co., Ltd. has assigned preliminary “AAA” ratings to two new series of debentures of DAD SPV Co., Ltd. (SPV or the Issuer): up to Bt2,200 million with a tenor of 14 years, and up to Bt6,000 million with a tenor of 19 years. At the same time, TRIS Rating has affirmed the “AAA” ratings for existing debentures of SPV (DAD12NA, DAD15NA, DAD20NA, DAD25NA) with tenors of 7, 10, 15, and 20 years. All the rated debentures are issued under the securitization program. The proceeds from this program will be used by Dhanarak Asset Development Co., Ltd. (DAD or the Originator) to fund the construction of the Bangkok Metropolitan Government Office Center (the Government Office Center) on Chaeng Wattana road, which will be leased to the Treasury Department (TD or the Tenant) for 30 years.
The ratings reflect the creditworthiness of TD, which is a department of the Thai government, as the sole tenant of the Government Office Center. The ratings also address the certainty of the cash flow streams from the lease and service payments from TD and the sufficiency of the cash flows to fulfill all obligations in a timely manner.
TRIS Rating reported that SPV or the Issuer is a limited liability company established under the laws of Thailand and was granted special purpose vehicle status by the Securities and Exchange Commission (SEC). The Issuer is 49% owned by DAD, a wholly-owned subsidiary of the Ministry of Finance (MOF). All outstanding and new debentures are parts of the Issuer’s Bt24,000 million securitization program to be issued within 3 years (2005-2007), with the remaining debentures expected in 2007. The rated debentures are structured to receive lease and service payments from TD under a 30-year Building Space Lease Agreement, a 30-year Service Agreement, and a 5-year Furniture Procurement Agreement, collectively referred to as the “Underlying Agreements,” that TD has engaged with DAD. The purchase price of these rights at Bt40,000 million was partly financed by the proceeds from the first issue of debentures while the remaining balance was paid in the form of a subordinated promissory note (sub P/N), which is ranked lower than the rated debentures. The proceeds from the two new series of debentures will be used to redeem a portion of the sub P/N previously issued to DAD. The remaining portion of the sub P/N will serve as a credit enhancement for both new and existing debentureholders.
TRIS Rating said, TD is not allowed to terminate the lease as long as the debentures issued under this securitization program or any new debentures issued to replace the existing debentures have not been fully redeemed. Any future issuance of debentures by the Issuer under this securitization program will be subject to TRIS Rating’s affirmation that the ratings of the outstanding debentures will not be adversely affected.