(Repeat for additional subscribers)
June 25 (The following statement was released by the rating agency)
Fitch Ratings (Thailand) Limited has
downgraded the National Long-Term Rating on Ek-Chai Distribution System Company
Limited's (ECDS) guaranteed debentures due 2015 to 'AA(tha)' from 'AA+(tha)'.
The Outlook is Stable.
The downgrade follows the agency's downgrade of Tesco PLC's (Tesco) Long-Term
Issuer Default Rating (IDR) to 'BBB' from 'BBB+'. For further details, please
see 'Fitch Downgrades Tesco to 'BBB'; Stable Outlook', published on 23 June 2014
and available at www.fitchratings.com.
KEY RATING DRIVERS
Guarantee from Tesco: The rating of ECDS's guaranteed debentures is based on the
full and irrevocable guarantee provided by Tesco, a majority shareholder of
Limitation on Sovereign Intervention: Tesco would not be liable to pay this
guarantee in case of 1) expropriation or nationalisation of 10% or THB5bn or
more of the issuer's consolidated fixed assets, or with effect of preventing the
issuer and its subsidiaries from pursuing their ordinary course of business; or
2) sovereign intervention preventing the issuer from transferring monies or
converting foreign currency to pay the obligation under the debentures, or
causing Tesco to lose its status as the majority or controlling shareholder.
Positive: Future developments that may, individually or collectively, lead to
- An upgrade of Tesco's rating.
Negative: Future developments that may, individually or collectively, lead to
- 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.