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Fitch Affirms Holcim Capital (Thailand)'s Bonds at 'AA-(tha)'
February 12, 2015 / 4:47 AM / 3 years ago

Fitch Affirms Holcim Capital (Thailand)'s Bonds at 'AA-(tha)'

(The following statement was released by the rating agency) BANGKOK/SINGAPORE, February 11 (Fitch) Fitch Ratings (Thailand) Limited has affirmed Holcim Capital (Thailand) Ltd.'s (HCT) THB1.22bn guaranteed debentures due 2015 at the National Long-Term Rating of 'AA-(tha)'. The Outlook is Stable. KEY RATING DRIVERS Guaranteed by Parent: The National Long-Term Rating on HCT's debentures is based entirely on an irrevocable and unconditional guarantee provided by Switzerland's Holcim Ltd (Holcim; BBB/Stable). Holcim's Long-Term Foreign-Currency Issuer Default Rating (IDR) is two notches below Thailand's 'A-' Long-Term Local-Currency IDR, which correlates with 'AA-(tha)' on the Thai National Rating scale. Financing Vehicle: HCT provides financial support to Holcim's affiliated companies in Thailand by investing in debentures issued by Thai Roc-Cem Ltd., which holds 27.5% of Siam City Cement Public Company Limited (SCCC, A(tha)/Stable) - Thailand's second-largest cement producer. HCT's shareholders are Thai Roc-Cem Ltd. (51%) and Holderfin B.V. Netherlands (49%). Thai Roc-Cem Ltd. is 100%-owned by Holcim Participations (Thailand) Ltd., a 100%-owned subsidiary of Holderfin B.V., which is in turn wholly owned by Holcim. Holcim Group's Worldwide Presence: Holcim group has a strong global market position in cement, aggregates and concrete. There is wide geographical diversification, with a presence in more than 70 countries and a balanced mix between developed and emerging markets. RATING SENSITIVITY Any changes in the International Rating differential between Holcim and the Thai sovereign rating may affect the debentures' National Rating. A one-notch change in the International Rating could also result in a change of more than one notch in the National Rating. Holcim's rating sensitivities were outlined by Fitch in its Rating Action Commentary titled 'Fitch Affirms Holcim at 'BBB'; Outlook Stable' of 5 February 2015. Future developments that could lead to positive rating actions of Holcim include: - Funds from operations (FFO) adjusted gross leverage improving to below 2.5x and net leverage below 2.0x. Adjusted gross and net leverage is calculated by pro-rata consolidation of the Indian controlled subsidiaries - Consolidated FFO adjusted gross leverage below 3.0x - Consolidated free cash flow (FCF) materially positive Future developments that could lead to negative rating action of Holcim include: - EBIT margin, pro-rata consolidated for the Indian subsidiaries, below 10% - FFO adjusted gross leverage above 3.5x and net leverage above 3.0x, pro-rata consolidated for the Indian controlled subsidiaries - Consolidated FFO adjusted gross leverage above 4.0x - Consolidated FCF remaining neutral to negative Contacts: Primary Analyst Obboon Thirachit Director +66 2108 0159 Fitch Ratings (Thailand) Limited Level 17, Park Ventures, 57 Wireless Road, Lumpini, Patumwan, Bangkok 10330 Secondary Analyst Lertchai Kochareonrattanakul Senior Director +66 2108 0158 Committee Chairperson Vicky Melbourne Senior Director +61 2 8256 0325 Media Relations: Leslie Tan, Singapore, Tel: +65 67 96 7234, Email: Note to Editors: Fitch's National ratings provide a relative measure of creditworthiness for rated entities in countries with relatively low international sovereign ratings and where there is demand for such ratings. The best risk within a country is rated 'AAA' and other credits are rated only relative to this risk. National ratings are designed for use mainly by local investors in local markets and are signified by the addition of an identifier for the country concerned, such as 'AAA(tha)' for National ratings in Thailand. Specific letter grades are not therefore internationally comparable. Additional information is available at Applicable criteria, "Corporate Rating Methodology - Including Short-Term Ratings and Parent and Subsidiary Linkage"', dated 28 May 2014, and "National Scale Ratings Criteria", dated 30 October 2013, are available at Applicable Criteria and Related Research: Corporate Rating Methodology - Including Short-Term Ratings and Parent and Subsidiary Linkage here National Scale Ratings Criteria here Additional Disclosure Solicitation Status here ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

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